Assume that the lease contract involved an identified leased equipment at a cost of $120,000 by the lessor. The term of the lease is 6 years beginning December 31, 2021, with equal rental payments of$30,044 beginning December 31, 2021. The fair value of the equipment at commencement of the lease is $150,001. The equipment has a useful life of 6 years with no salvage value. The lease has animplicit interest rate of 8%, no bargain purchase option, and no transfer of title. Collectibility of lease payments is probable.Prepare the lessor's journal entries on December 31, 2021, at commencement of the lease. Show all your work for partial credits.

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Answered: Assume that the lease contract involved…

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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