Cullumber Company, a machinery dealer, leased a machine to Ivanhoe Corporation on January 1, 2025. The lease is for an 8-year period and requires equal annual payments of $29,169 at the beginning of each year. The first payment is received on January 1, 2025. Cullumber had purchased the machine during 2024 for $109,000. Collectibility of lease payments by Cullumber is probable. Cullumber set the annual rental to ensure a 636 rate of return. The machine has an economic life of 10 years with no residual value and reverts to Cullumber 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 0 decimal places eg. 5,275.) Amount of the lease receivable $ (b) eTextbook and Media List of Accounts Date 192,001 Prepare all necessary journal entries for Cullumber 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 0 decimal places eg. 5,275. Record journal entries in the order presented in the problem.) Account Titles and Explanation (To record the lease) (To record the first lease payment) Attempts: 1 of 3 used Debit 00000 с
Cullumber Company, a machinery dealer, leased a machine to Ivanhoe Corporation on January 1, 2025. The lease is for an 8-year period and requires equal annual payments of $29,169 at the beginning of each year. The first payment is received on January 1, 2025. Cullumber had purchased the machine during 2024 for $109,000. Collectibility of lease payments by Cullumber is probable. Cullumber set the annual rental to ensure a 636 rate of return. The machine has an economic life of 10 years with no residual value and reverts to Cullumber 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 0 decimal places eg. 5,275.) Amount of the lease receivable $ (b) eTextbook and Media List of Accounts Date 192,001 Prepare all necessary journal entries for Cullumber 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 0 decimal places eg. 5,275. Record journal entries in the order presented in the problem.) Account Titles and Explanation (To record the lease) (To record the first lease payment) Attempts: 1 of 3 used Debit 00000 с
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Cullumber Company, a machinery dealer, leased a machine to Ivanhoe Corporation on January 1, 2025. The lease is for an 8-year
period and requires equal annual payments of $29,169 at the beginning of each year. The first payment is received on January 1, 2025.
Cullumber had purchased the machine during 2024 for $109,000. Collectibility of lease payments by Cullumber is probable.
Cullumber set the annual rental to ensure a 636 rate of return. The machine has an economic life of 10 years with no residual value and
reverts to Cullumber 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 0 decimal places eg. 5,275.)
Amount of the lease receivable $
(b)
eTextbook and Media
List of Accounts
Date
192,001
Prepare all necessary journal entries for Cullumber 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 0 decimal places eg. 5,275. Record journal entries in the order presented in the problem.)
Account Titles and Explanation
(To record the lease)
(To record the first lease payment)
Attempts: 1 of 3 used
Debit
00000
с
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