Cullumber 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 $29,169 at the beginning of each year. The first payment is received on January 1, 2020. Cullumber had purchased the machine during 2019 for $109,000. Collectibility of lease payments by Cullumber is probable. Cullumber 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 Cullumber at the termination of the lease. Prepare all necessary journal entries for Cullumber for 2020.
Cullumber 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 $29,169 at the beginning of each year. The first payment is received on January 1, 2020. Cullumber had purchased the machine during 2019 for $109,000. Collectibility of lease payments by Cullumber is probable. Cullumber 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 Cullumber at the termination of the lease. Prepare all necessary journal entries for Cullumber for 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cullumber 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 $29,169 at the beginning of each year. The first payment is received on January 1, 2020. Cullumber had purchased the machine during 2019 for $109,000. Collectibility of lease payments by Cullumber is probable. Cullumber set the annual rental to ensure a 6%
Prepare all necessary
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