Blossom Company, a machinery dealer, leased a machine to Crane Corporation on January 1, 2025. The lease is for an 8-year period and requires equal annual payments of $30,536 at the beginning of each year. The first payment is received on January 1, 2025. Blossom had purchased the machine during 2024 for $124,000. Collectibility of lease payments by Blossom is probable. Blossom 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 Blossom at the termination of the lease. Click here to view factor tables. (a) Your answer is correct. 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 O decimal places e.g. 5,275.) (b) Amount of the lease receivable $ eTextbook and Media Solution 201000 $30,536 × 6.58238* = $201,000 *Present value of an annuity due of 1 for 8 periods at 6%. List of Accounts Assistance Used Attempts: unlimited Prepare all necessary journal entries for Blossom for 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places e.g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation (To record the lease) (To record the first lease payment) Debit Cre
Blossom Company, a machinery dealer, leased a machine to Crane Corporation on January 1, 2025. The lease is for an 8-year period and requires equal annual payments of $30,536 at the beginning of each year. The first payment is received on January 1, 2025. Blossom had purchased the machine during 2024 for $124,000. Collectibility of lease payments by Blossom is probable. Blossom 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 Blossom at the termination of the lease. Click here to view factor tables. (a) Your answer is correct. 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 O decimal places e.g. 5,275.) (b) Amount of the lease receivable $ eTextbook and Media Solution 201000 $30,536 × 6.58238* = $201,000 *Present value of an annuity due of 1 for 8 periods at 6%. List of Accounts Assistance Used Attempts: unlimited Prepare all necessary journal entries for Blossom for 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places e.g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation (To record the lease) (To record the first lease payment) Debit Cre
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 10MC: On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring...
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Transcribed Image Text:Blossom Company, a machinery dealer, leased a machine to Crane Corporation on January 1, 2025. The lease is for an 8-year period
and requires equal annual payments of $30,536 at the beginning of each year. The first payment is received on January 1, 2025.
Blossom had purchased the machine during 2024 for $124,000. Collectibility of lease payments by Blossom is probable. Blossom 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
Blossom at the termination of the lease.
Click here to view factor tables.
(a)
Your answer is correct.
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 O decimal places e.g. 5,275.)
(b)
Amount of the lease receivable $
eTextbook and Media
Solution
201000
$30,536 × 6.58238* = $201,000
*Present value of an annuity due of 1 for 8 periods at 6%.
List of Accounts
Assistance Used
Attempts: unlimited
Prepare all necessary journal entries for Blossom for 2025. (List all debit entries before credit entries. Credit account titles are
automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter O for the amounts. Round answers to O decimal places e.g. 5,275. Record journal entries in the order presented in the problem.)
Date
Account Titles and Explanation
(To record the lease)
(To record the first lease payment)
Debit
Cre
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