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Crane Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020....

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Accounting

Crane Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-year period and requires equal annual payments of $ 30,688 at the beginning of each year. The first payment is received on January 1, 2020. Crane had purchased the machine during 2019 for $ 115,000. Collectibility of lease payments by Crane is probable. Crane set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Crane at the termination of the lease.

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Prepare all necessary journal entries for Crane for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit 1/1/20 (To record the lease) (To record the first lease payment) 12/31/20

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