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Blossom has the option to purchase the equipment for $$26,000$ upon termination of the lease. It is not reasonably certain that Blossom will exercise this option. Kingbird Leasing Company signs a lease agreement on January $1,2020,$ to lease electronic equipment to Blossom Company. The term of the non$-$cancelable lease is $2$ years, and payments are required at the end of each year. The following information relates to this agreement:

Blossom has the option to purchase the equipment for $$26,000$ upon termination of the lease. It is not reasonably certain that Blossom will exercise this option.

The equipment has a cost of $$320,000$ and fair value of $$376,000$ to Kingbird Leasing. The useful economic life is $2$ years, with a residual value of $$26,000.$

Kingbird Leasing desires to earn a return of $5\%$ on its investment.

Collectibility of the payments by Kingbird Leasing is probable.

The equipment has a cost of $$320,000$ and fair value of $$376,000$ to Kingbird Leasing. The useful economic life is $2$ years, with a residual value of $$26,000.$

Kingbird Leasing desires to earn a return of $5\%$ on its investment.

Collectibility of the payments by Kingbird Leasing is probable.

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Debit

Credit

$\frac{12}{31}\frac{?}{21}$

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