a.
The classification of lease.
Given information:
Lease term is 4 years.
Economic life of asset is 4 years.
Fair value of the asset is $232,511.
Carrying value of asset is $200,000.
Interest rate is 8%
Annual lease payments are $65,000 due on Jan/1 each year
b.
To prepare: The amortization tables for the lease term.
Given information:
Lease term is 4 years.
Economic life of asset is 4 years.
Fair value of the asset is $232,511.
Carrying value of asset is $200,000.
Interest rate is 8%
Annual lease payments are $65,000 due on January 1 each year
c.
To prepare: The journal entries of sales type lease for lessor for year one.
Given information:
Lease term is 4 years.
Economic life of asset is 4 years.
Fair value of the asset is $232,511.
Carrying value of asset is $200,000.
Interest rate is 8%
Annual lease payments are $65,000 due on Jan/1 each year
d.
To prepare: The journal entries for the lessee for year one.
Given information:
Lease term is 4 years.
Economic life of asset is 4 years.
Fair value of the asset is $232,511.
Carrying value of asset is $200,000.
Interest rate is 8%
Annual lease payments are $65,000 due on Jan/1 each year
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