Tamarisk Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Carla Vista Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Carla Vista has the option to purchase the equipment for $19,000 upon termination of the lease. It is not reasonably certain that Carla Vista will exercise this option. 2. The equipment has a cost of $180,000 and fair value of $233,500 to Tamarisk Leasing. The useful economic life is 2 years, with a residual value of $19,000. 3. Tamarisk Leasing desires to earn a return of 5% on its investment. 4. Collectibility of the payments by Tamarisk Leasing is probable. Click here to view factor tables. (a) Prepare the journal entries on the books of Tamarisk Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title

Tamarisk Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Carla Vista Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Carla Vista has the option to purchase the equipment for $19,000 upon termination of the lease. It is not reasonably certain that Carla Vista will exercise this option. 2. The equipment has a cost of $180,000 and fair value of $233,500 to Tamarisk Leasing. The useful economic life is 2 years, with a residual value of $19,000. 3. Tamarisk Leasing desires to earn a return of 5% on its investment. 4. Collectibility of the payments by Tamarisk Leasing is probable. Click here to view factor tables. (a) Prepare the journal entries on the books of Tamarisk Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 2E: Lessee Accounting with Payments Made at Beginning of Year Adden Company signs a lease agreement...

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(a)

Prepare the journal entries on the books of Tamarisk Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.)

Date

Account Titles and Explanation

Debit

Credit

enter an account title for the journal entry on January 1 2020

enter a debit amount

enter a credit amount

enter an account title for the journal entry on January 1 2020

enter a debit amount

enter a credit amount

enter an account title for the journal entry on January 1 2020

enter a debit amount

enter a credit amount

enter an account title for the journal entry on January 1 2020

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

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1.		Carla Vista has the option to purchase the equipment for $19,000 upon termination of the lease. It is not reasonably certain that Carla Vista will exercise this option.
2.		The equipment has a cost of $180,000 and fair value of $233,500 to Tamarisk Leasing. The useful economic life is 2 years, with a residual value of $19,000.
3.		Tamarisk Leasing desires to earn a return of 5% on its investment.
4.		Collectibility of the payments by Tamarisk Leasing is probable.