Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. (3) firm g, a dealer lessor, signed a finance leas

(3) Firm G, a dealer lessor, signed a finance lease with Firm H. We know...

80.2K

Verified Solution

Question

Accounting

(3) Firm G, a dealer lessor, signed a finance lease with Firm H. We know the following
information:
Lease period: 4 years, beginning on 1 Jan 2018.
The selling price of the leased equipment is 80,000.
Firm G paid 65,000 to purchase the leased equipment on 1 Jan 2018.
Periodic payment: 22,346 payable annually in advance.
The first lease payment is on 1 Jan 2018 & the remaining three subsequent lease payments
are on each reporting date (i.e., reporting date, 31Dec )
The estimated useful life of the leased equipment is 4 years.
The lessee will return the leased equipment to the lessor at the end of the lease term.
The expected residual value of the equipment at the end of the lease term is 0.
The residual value of leased equipment is not guaranteed.
Implicit interest rate: 8%
Incremental borrowing rates: 10%
The lessee does not know the implicit interest rate.
The lessee uses the straight-line depreciation method for the leased equipment.
(a) Write down all the journal entries related to the leased equipment for the lessor in 2018.
Answer:
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students