Metlock Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Ivanhoe Company. Thetermof the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates tothis agreement:1.Ivanhoe has the option to purchase the equipment for $22.000 upon termination of the lease. It is not reasonably certainthat Ivanhoe will exercise this option.The equipment has a cost of $240,000 and fair value of $269,000 to Metlock Leasing. The useful economic life is 2 years,with a residual value of $22,000.2.3.Metlock Leasing desires to earn a return of 5% on its investment.Collectibility of the payments by Metlock Leasing is probable.4.Click here to view factor tables.Prepare the journal entries on the books of Metlock Leasing to reflect the payments received under the lease and to recognizeincome for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indentmanually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimalplaces eg. 5,275.)DateAccount Titles and ExplanationDebitCredit>

Lease contact provides the right to the lessee to use an asset but it does not provide the…

Metlock Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Ivanhoe Company. The termof the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Ivanhoe has the option to purchase the equipment for $22,000 upon termination of the lease. It is not reasonably certain that Ivanhoe will exercise this option. 2. The equipment has a cost of $240,000 and fair value of $269,000 to Metlock Leasing. The useful economic life is 2 years, with a residual value of $22,000. 3. Metlock Leasing desires to earn a return of 5% on its investment. Collectibility of the payments by Metlock Leasing is probable. 4. Click here to view factor tables. Prepare the journal entries on the books of Metlock Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. 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.)

Metlock Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Ivanhoe Company. The termof the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Ivanhoe has the option to purchase the equipment for $22,000 upon termination of the lease. It is not reasonably certain that Ivanhoe will exercise this option. 2. The equipment has a cost of $240,000 and fair value of $269,000 to Metlock Leasing. The useful economic life is 2 years, with a residual value of $22,000. 3. Metlock Leasing desires to earn a return of 5% on its investment. Collectibility of the payments by Metlock Leasing is probable. 4. Click here to view factor tables. Prepare the journal entries on the books of Metlock Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. 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.)

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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