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Marin Leasing Company signs a lease agreement on January 1, 2025, to lease electronic equipment...

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Accounting

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Marin Leasing Company signs a lease agreement on January 1, 2025, to lease electronic equipment to Cullumber 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. 1. Cullumber has the option to purchase the equipment for $16,000 upon termination of the lease. It is not reasonably certain that Cullumber will exercise this option. 2. The equipment has a cost of $120,000 and fair value of $163,000 to Marin Leasing. The usefuleconomic life is 2 years, with a residual value of $16,000. 3. Marin Leasing desires to earn a return of 6% on its investment. 4. Collectibility of the payments by Marin Leasing is probable. Lease Receivable 163000 Cost of Goods Sold Sales Revenue Inventory Cash Lease Receivable Interest Revenue Cash Lease Receivable Interest Revenue

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