Sandhill Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8- year period and requires equal annual payments of $31,903 at the beginning of each year. The first payment is received on January 1, 2020. Sandhill had purchased the machine during 2019 for $127,000. Collectibility of lease payments by Sandhill is probable. Sandhill 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 Sandhill at the termination of the lease. Prepare all necessary journal entries for Sandhill for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.)

Sandhill Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8- year period and requires equal annual payments of $31,903 at the beginning of each year. The first payment is received on January 1, 2020. Sandhill had purchased the machine during 2019 for $127,000. Collectibility of lease payments by Sandhill is probable. Sandhill 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 Sandhill at the termination of the lease. Prepare all necessary journal entries for Sandhill for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round 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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