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Sandhill 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 $31,903 at the beginning of each year. The first payment is received on January 1, 2020. Sandhill had purchased the machine during 2016 for $127,000. Collectibility of lease payments by Sandhill is probable. Sandhill 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 Sandhill at the termination of the lease. Click here to view factor tables.

Compute the amount of the lease receivable. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places e.g. 5,275.) Amount of the lease receivable $enter a dollar amount of the lease receivable rounded to 0 decimal places

Prepare all necessary journal entries for Sandhill 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 enter an account title to record the lease on January 1 enter a debit amount enter a credit amount enter an account title to record the lease on January 1 enter a debit amount enter a credit amount enter an account title to record the lease on January 1 enter a debit amount enter a credit amount enter an account title to record the lease on January 1 enter a debit amount enter a credit amount (To record the lease) enter an account title to record the first lease payment on January 1 enter a debit amount enter a credit amount enter an account title to record the first lease payment on January 1 enter a debit amount enter a credit amount (To record the first lease payment) 12/31/20 enter an account title for the journal entry on December 31 enter a debit amount enter a credit amount enter an account title for the journal entry on December 31 enter a debit amount enter a credit amount

Suppose the collectibility of the lease payments was not probable for Sandhill. Prepare the necessary journal entry for the company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 1/1/20 enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount

Suppose at the end of the lease term, Sandhill receives the asset and determines that it actually has a fair value of $960 instead of the anticipated residual value of $0. Record the entry to recognize the receipt of the asset for Sandhill at the end of the lease term. (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 enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount

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