Firm G a dealer lessor, signed a finance lease with Firm We know the following
information:
Lease period: years, beginning on Jan
The selling price of the leased equipment is
Firm G paid to purchase the leased equipment on Jan
Periodic payment: payable annually in advance.
The first lease payment is on Jan & the remaining three subsequent lease payments
are on each reporting date ie reporting date, Dec
The estimated useful life of the leased equipment is years.
The lessee will return the leased equipment to the lessor at the end of the lease term.
The expected residual value of the equipment at the end of the lease term is
The residual value of leased equipment is not guaranteed.
Implicit interest rate:
Incremental borrowing rates:
The lessee does not know the implicit interest rate.
The lessee uses the straightline depreciation method for the leased equipment.
a Write down all the journal entries related to the leased equipment for the lessor in
Answer:
