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On January 1, 2021, Alled Industries leased a high-performance conveyer to Karrier Company for a...

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Accounting

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On January 1, 2021, Alled Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Allied. The equipment cost Allied $956,400 and has an expected useful life of five years. Allied expcts the residual value at December 31,2024 , will be $300,400. Negotiations led to the lessee guarantecing a $340,400 residual value. Equal payments under the finance/sales type lease are $200.400 and are due on December 31 of each year with the first payment being made on December 31, 2021. Karrier is aware that Allied used a 4% interest rate when calculating lease payments. (EV of S1, PV afS1, EVA oLS1, EVA of S1, EVAD ol:S1 and PVAD of S1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the appropilate enties for both Karrier and Alled on January 1, 2021, to record the lease. 2. Prepare all appropriate entries for both Karrier and Allied on December 31, 2021, related to the lease

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