Skysong Leasing Company signs a lease agreement on January 1,2025, to lease electronic equipment to...
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Skysong Leasing Company signs a lease agreement on January to lease electronic equipment to Sheridan Company, The term of the noncancelable lease is years, and payments are required at the end of each year. The following information relates to this agreement. Sheridan has the option to purchase the equipment for $ upon termination of the lease. It is not reasonably certain that Sheridan will exercise this option. The equipment has a cost of $ and fair value of $ to Skysong Leasing. The Skysong Leasing desires to earn a return of on its investment. Collectibility of the payments by Skysong Leasing is probable. a Prepare the joyrnal entries on the books of Skysong Leasing to record the payments received under the lease and to recognize income for the years and b Assuming that Sheridan exercises its option to purchase the equipment on December prepare the journal entry to record the sale on Skysong Leasing's books.
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