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Blossom Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2022....

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Accounting

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Blossom Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2022. The lease is for an 8-year period and requires equal annual payments of $23,560 at the beginning of each year. The first payment is received on January 1, 2022. Blossom had purchased the machine during 2021 for $120,000. Collectibility of lease payments by Blossom is probable. Blossom set the annual rental to ensure a 4% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Blossom at the termination of the lease. Click here to view factor tables. Suppose at the end of the lease term, Blossom receives the asset and determines that it actually has a fair value of $1,000 instead of the anticipated residual value of $0. Record the entry to recognize the receipt of the asset for Blossom at the end of the lease term. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit 1/1/22

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