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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

FINANCIAL ACCOUNTING
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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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
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
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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