3 1.2.3.4.Carla Vista has the option to purchase the equipment for $24,500 upon termination of the lease. It is not reasonably certainthat Carla Vista will exercise this option.(a)The equipment has a cost of $290,000 and fair value of $319,000 to Tamarisk Leasing. The useful economic life is 2 years,with a residual value of $24,500.Tamarisk Leasing desires to earn a return of 6% on its investment.Collectibility of the payments by Tamarisk Leasing is probable.Click here to view factor tables.Your answer is partially correct.Prepare the journal entries on the books of Tamarisk Leasing to record the payments received under the lease and to recognizeincome for the years 2025 and 2026. (List all debit entries before credit entries. Credit account titles are automatically indented whenamount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for theaccount titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided andround final answers to 0 decimal places e.g. 5,275.)

Lease payments are regular payments made a lessee to a lessor in exchange for the using of an asset…

1. 2. 3. 4. Carla Vista has the option to purchase the equipment for $24,500 upon termination of the lease. It is not reasonably certain that Carla Vista will exercise this option. The equipment has a cost of $290,000 and fair value of $319,000 to Tamarisk Leasing. The useful economic life is 2 years, with a residual value of $24,500. Tamarisk Leasing desires to earn a return of 6% on its investment. Collectibility of the payments by Tamarisk Leasing is probable.

1. 2. 3. 4. Carla Vista has the option to purchase the equipment for $24,500 upon termination of the lease. It is not reasonably certain that Carla Vista will exercise this option. The equipment has a cost of $290,000 and fair value of $319,000 to Tamarisk Leasing. The useful economic life is 2 years, with a residual value of $24,500. Tamarisk Leasing desires to earn a return of 6% on its investment. Collectibility of the payments by Tamarisk Leasing is probable.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

1.
2.
3.
4.
Carla Vista has the option to purchase the equipment for $24,500 upon termination of the lease. It is not reasonably certain
that Carla Vista will exercise this option.
(a)
The equipment has a cost of $290,000 and fair value of $319,000 to Tamarisk Leasing. The useful economic life is 2 years,
with a residual value of $24,500.
Tamarisk Leasing desires to earn a return of 6% on its investment.
Collectibility of the payments by Tamarisk Leasing is probable.
Click here to view factor tables.
Your answer is partially correct.
Prepare the journal entries on the books of Tamarisk Leasing to record the payments received under the lease and to recognize
income for the years 2025 and 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when
amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the
account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and
round final answers to 0 decimal places e.g. 5,275.)

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