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C. Provide the entries for the lessor through the lease term. • Note: List multiple debits or credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Date Account Name Dr. Cr. Dec. 31, 2020 Lease Receivable 4,000 x Interest Revenue 1,347 x To record interest Jan. 1, 2021 Cash 8,810 Lease Receivable 8,810 v To record receipt of lease payment

C. Provide the entries for the lessor through the lease term. • Note: List multiple debits or credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Date Account Name Dr. Cr. Dec. 31, 2020 Lease Receivable 4,000 x Interest Revenue 1,347 x To record interest Jan. 1, 2021 Cash 8,810 Lease Receivable 8,810 v To record receipt of lease payment

FINANCIAL ACCOUNTING
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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c. Provide the entries for the lessor through the lease term. • Note: List multiple debits or credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Date Account Name Dr. Cr. Dec. 31, 2020 Lease Receivable 4,000 x Interest Revenue 1,347 x To record interest Jan. 1, 2021 Cash 8,810 v Lease Receivable 8,810 To record receipt of lease payment Dec. 31, 2021 Lease Receivable 819 v Interest Revenue 819 To record interest Jan. 1, 2022 Cash 8,810 v Lease Receivable 8,810 To record receipt of lease payment Dec. 31, 2022 Lease Receivable 340 Interest Revenue 340 To record interest Jan. 1, 2023 Cash 1,000 v Equipment 3,000 v Loss on Lease 2,000 v Lease Receivable 6,000
Transcribed Image Text:c. Provide the entries for the lessor through the lease term. • Note: List multiple debits or credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Date Account Name Dr. Cr. Dec. 31, 2020 Lease Receivable 4,000 x Interest Revenue 1,347 x To record interest Jan. 1, 2021 Cash 8,810 v Lease Receivable 8,810 To record receipt of lease payment Dec. 31, 2021 Lease Receivable 819 v Interest Revenue 819 To record interest Jan. 1, 2022 Cash 8,810 v Lease Receivable 8,810 To record receipt of lease payment Dec. 31, 2022 Lease Receivable 340 Interest Revenue 340 To record interest Jan. 1, 2023 Cash 1,000 v Equipment 3,000 v Loss on Lease 2,000 v Lease Receivable 6,000
Dunlap Company leased a large copier to Rust Company for a three-year period. Dunlap paid $30,000 for the copier and immediately leased it on January 1, 2020 (estimated useful life is four years, and Dunlap expects the expected residual value at the end of the lease term is $6,000). Dunlap used an expected rate of return of 6% (known by Rust). The lessee agreed to guarantee two-thirds ($4,000) of the residual value. The first lease payment is due on January 1, 2020, and the accounting periods for both entities end on December 31. At the lease termination date, an independent appraiser provided an estimated residual value of $3,000. The lessee immediately paid the difference of $1,000 ($4,000 guaranteed residual value minus $3,000, the actual residual value).
Transcribed Image Text:Dunlap Company leased a large copier to Rust Company for a three-year period. Dunlap paid $30,000 for the copier and immediately leased it on January 1, 2020 (estimated useful life is four years, and Dunlap expects the expected residual value at the end of the lease term is $6,000). Dunlap used an expected rate of return of 6% (known by Rust). The lessee agreed to guarantee two-thirds ($4,000) of the residual value. The first lease payment is due on January 1, 2020, and the accounting periods for both entities end on December 31. At the lease termination date, an independent appraiser provided an estimated residual value of $3,000. The lessee immediately paid the difference of $1,000 ($4,000 guaranteed residual value minus $3,000, the actual residual value).
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