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A finance lease requires eight annual payments of $25,000 with the first payment at the...

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Accounting

A finance lease requires eight annual payments of $25,000 with the first payment at the beginning of the lease. The interest rate is 8%. The lessor had acquired the leased equipment for $135,000.

The initial entry on the books of the lessor would include:

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Debit cost of goods sold $110,000 Credit sales revenue $143,666 Debit right-of-use asset $135,000 Debit lease receivable $155,159

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