Question

The lease agreement and related facts indicate the following: Leased equipment had a retail cash selling price of $420,000. Its useful life was five years with no residual value. The lease term is Five years and the lessor paid $325,000 to acquire the equipment (thus, selling profit). Lessor’s implicit rate when calculating annual lease payments was 10%. Annual lease payments beginning January 1, 2018, the beginning of the lease, were $100,723. Incremental costs of commissions for brokering the lease and consummating the completed lease transaction incurred by the lessor were $8,700. 1. & 2. Prepare the appropriate entries for the lessor to record the lease and the initial payment at its commencement and any entry(s) necessary at December 31, 2018, the fiscal year-end. (Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Solution ales lease thal includes Selfing psof с。stSare expensea inte Period of ,.sole,, rtfat ,s, otrebegininjol lease Tlis assomes Ral sales ncusoin tReasecos enchke the sale of He Jeassed asset Bginin of tRe lease T anuany I 2018 vecier able nd de bit cast of odS Sand cedi Sales svenue and CTedit eavipment as skown be)。 pabe Accoun bile 90)8Lease secievable Cfair value) 420,000 325ooc -Costal goeds . Sold Cessos cess/ 420, ooo Jan GQui pment Ciessoo s cosb) The enksy i oed e ease prymeni. To beroers tie entiz debib sellng Expense cask as Sloisn telsu Account ile Selling expense cosh Cinibial disedt casts cre dik ,ease ơe ceivable as Skou, be lo pape Account sitlc o 18 oo, T23 lease oeccivble Debis 3, 92 credi Date ·31,522 Dec 31