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Bonita Company manufactures a check-in kiosk with an estimated economic life of 12 years and...

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Accounting

Bonita Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $284,089, and its unguaranteed residual value at the end of the lease term is estimated to be $21,500. National will pay annual payments of $42,300 at the beginning of each year. Bonita incurred costs of $189,600 in manufacturing the equipment and $3,700 in sales commissions in closing the lease. Bonita has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 11%. Click here to view factor tables.

(a)

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Discuss the nature of this lease in relation to the lessor. This is a operating leasefinance leasesales-type lease. Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.)

(1) Lease receivable

$

(2) Sales price

$

(3) Cost of sales

$

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