Do not give solution in image Metlock Leasing Company signs a lease agreement on January 1, 2025, 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 thisagreement.1.2.3.4.Ivanhoe has the option to purchase the equipment for $16.500 upon termination of the lease. It is not reasonably certain thatIvanhoe will exercise this option.The equipment has a cost of $130,000 and fair value of $161,000 to Metlock Leasing. The useful economic life is 2 years, witha residual value of $16,500.Metlock Leasing desires to earn a return of 5% on its investment.Collectibility of the payments by Metlock Leasing is probable. Prepare the journal entries on the books of Metlock Leasing to record the payments received under the lease and to recognizeincome for the years 2025 and 2026. (List all debit entries before credit entries. Credit account titles are automatically indented whenamount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry for theaccount titles and enter 0 for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided andround final answers to 0 decimal places eg. 5,275.)Account Titles and ExplanationDate1/1/2512/31/2512/31/26DebitCredit

Lease Receivable : Lease Receivables refers to all past, present, and future lease rents, rent,…

Prepare the journal entries on the books of Metlock Leasing to record the payments received under the lease and to recognize income for the years 2025 and 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places eg. 5,275.)

Prepare the journal entries on the books of Metlock Leasing to record the payments received under the lease and to recognize income for the years 2025 and 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places eg. 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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