Question 5 of 10 2.95/3 E Prepare all of the journal entries for the lessor for 2020 and 2021 to record the lease agreement, the receipt of lease payments, and the recognition of revenue. Assume the lessor's annual accounting period ends on December 31, and it does not use reversing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation 1/20 /20 31/20 v /21 31/21 V Lease Receivable Cost of Goods Sold Sales Revenue Inventory (To record the lease) Cash Lease Receivable (To record the receipt of lease payment) Lease Receivable Interest Revenue Cash Lease Receivable Lease Receivable Interest Revenue ↓ Debit 451,000.00 91.285.00 35,972.00 91,285.00 30,440.00 Credit 451,000.00 91,285.00 35,972.00 91,285.00 30,440.00 Notes: • Here are what I am asking for help that I am pointing with an arrows
Question 5 of 10 2.95/3 E Prepare all of the journal entries for the lessor for 2020 and 2021 to record the lease agreement, the receipt of lease payments, and the recognition of revenue. Assume the lessor's annual accounting period ends on December 31, and it does not use reversing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation 1/20 /20 31/20 v /21 31/21 V Lease Receivable Cost of Goods Sold Sales Revenue Inventory (To record the lease) Cash Lease Receivable (To record the receipt of lease payment) Lease Receivable Interest Revenue Cash Lease Receivable Lease Receivable Interest Revenue ↓ Debit 451,000.00 91.285.00 35,972.00 91,285.00 30,440.00 Credit 451,000.00 91,285.00 35,972.00 91,285.00 30,440.00 Notes: • Here are what I am asking for help that I am pointing with an arrows
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Question 5 of 10 <
Sage Hill Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information
relates to this agreement.
The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6
years.
The cost of the asset to the lessor is $451,000. The fair value of the asset at January 1, 2020, is $451,000.
The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of
$24,225, none of which is guaranteed.
The agreement requires equal annual rental payments, beginning on January 1, 2020.
Collectibility of the lease payments by Sage Hill is probable.
Click here to view factor tables.
Assuming the lessor desires a 10% rate of return on its investment, calculate the amount of the annual rental payment required.
(For calculation purposes, use 5 decimal places as displayed in the factor table provided and the final answer to O decimal places e.g.
5,275.)
1.
2.
3.
4.
5.
Amount of the annual rental payment
Prepare an amortization schedule that is suitable for the lessor for the lease term. (Round answers to O decimal places e.g. 5,275.)
SAGE HILL LEASING COMPANY (Lessor)
Lease Amortization Schedule
Annual Lease Payment Plus
URV
$
$
0
91,285.00
91,285.00
91,285.00
91,285.00
91,285.00
91,285.00
24,225.00
571,935.00
$
LA
$
Interest on Lease
Receivable
0
0
35,972.00
30,440.00
24,356.00
17,663.00
10,301.00
2,203.00
120,935.00
$
$
91,285.00
Recovery of Lease
Receivable
0
91,285.00
55,313.00
60,845.00
66,929.00
73,622.00
80,984.00
22,022.00
451,000.00
$
Lease Receivable
451,000.00
359,715.00
304,402.00
243,557.00
176,628.00
103,006.00
22,022.00
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F730e9f69-abda-416d-b6fe-120bc09f9874%2Feeb03a77-e761-49e7-8316-f832463c448d%2F0c33phf_processed.png&w=3840&q=75)
Transcribed Image Text:Question 5 of 10 <
Sage Hill Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information
relates to this agreement.
The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6
years.
The cost of the asset to the lessor is $451,000. The fair value of the asset at January 1, 2020, is $451,000.
The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of
$24,225, none of which is guaranteed.
The agreement requires equal annual rental payments, beginning on January 1, 2020.
Collectibility of the lease payments by Sage Hill is probable.
Click here to view factor tables.
Assuming the lessor desires a 10% rate of return on its investment, calculate the amount of the annual rental payment required.
(For calculation purposes, use 5 decimal places as displayed in the factor table provided and the final answer to O decimal places e.g.
5,275.)
1.
2.
3.
4.
5.
Amount of the annual rental payment
Prepare an amortization schedule that is suitable for the lessor for the lease term. (Round answers to O decimal places e.g. 5,275.)
SAGE HILL LEASING COMPANY (Lessor)
Lease Amortization Schedule
Annual Lease Payment Plus
URV
$
$
0
91,285.00
91,285.00
91,285.00
91,285.00
91,285.00
91,285.00
24,225.00
571,935.00
$
LA
$
Interest on Lease
Receivable
0
0
35,972.00
30,440.00
24,356.00
17,663.00
10,301.00
2,203.00
120,935.00
$
$
91,285.00
Recovery of Lease
Receivable
0
91,285.00
55,313.00
60,845.00
66,929.00
73,622.00
80,984.00
22,022.00
451,000.00
$
Lease Receivable
451,000.00
359,715.00
304,402.00
243,557.00
176,628.00
103,006.00
22,022.00
0
![Question 5 of 10
2.95/3
Prepare all of the journal entries for the lessor for 2020 and 2021 to record the lease agreement, the receipt of lease payments,
and the recognition of revenue. Assume the lessor's annual accounting period ends on December 31, and it does not use reversing
entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the
order presented in the problem.)
Date
Account Titles and Explanation
1/20
/20
31/20
/21
31/21
Lease Receivable
Cost of Goods Sold
Sales Revenue
Inventory
(To record the lease)
Cash
Lease Receivable
(To record the receipt of lease payment)
Lease Receivable
Interest Revenue
Cash
Lease Receivable
Lease Receivable
Interest Revenue
Debit
451,000.00
91,285.00
35,972.00
91,285.00
30,440.00
Credit
451,000.00
91,285.00
35,972.00
91,285.00
30,440.00
Notes:
• Here are what I am asking for help that I am pointing with
an arrowS](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F730e9f69-abda-416d-b6fe-120bc09f9874%2Feeb03a77-e761-49e7-8316-f832463c448d%2Fj2h59f8_processed.png&w=3840&q=75)
Transcribed Image Text:Question 5 of 10
2.95/3
Prepare all of the journal entries for the lessor for 2020 and 2021 to record the lease agreement, the receipt of lease payments,
and the recognition of revenue. Assume the lessor's annual accounting period ends on December 31, and it does not use reversing
entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the
order presented in the problem.)
Date
Account Titles and Explanation
1/20
/20
31/20
/21
31/21
Lease Receivable
Cost of Goods Sold
Sales Revenue
Inventory
(To record the lease)
Cash
Lease Receivable
(To record the receipt of lease payment)
Lease Receivable
Interest Revenue
Cash
Lease Receivable
Lease Receivable
Interest Revenue
Debit
451,000.00
91,285.00
35,972.00
91,285.00
30,440.00
Credit
451,000.00
91,285.00
35,972.00
91,285.00
30,440.00
Notes:
• Here are what I am asking for help that I am pointing with
an arrowS
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