Ch 15 Exercise 2 Finance/sale Lease Journal entry On January 1, 2019, Comet International (Lessor)...
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Ch 15 Exercise 2 Finance/sale Lease Journal entry On January 1, 2019, Comet International (Lessor) leased equipment to Ajax Limited (Lessee) which Comet purchased for this purpose. The equipment has an estimated useful life of 8 years with no salvage value. The lease term is 5 years with five annual payments $21,978 due at the beginning of 2019 and at each December 31 from 2019 to 2022. The implicit interest rate of the lease is 6%, which is also Ajaxs cost of capital. At the end of the lease period on December 31, 2023, Ajax can exercise a bargain purchase option for $25,000. Required: 1) Using the schedule of lease payments calculated for Ch 15 Exercise-1 to prepare all journal entries for the lessor from the beginning to the end of the lease. How much is total lease revenue? 2) Using the schedule of lease payments calculated for Ch 15 Exercise-1 to prepare all journal entries for the lessee from the beginning to the end of the lease. How much is total expense including lease expense and amortization expense? 3) Sales lease with selling profit: Write the journal entry for the lessor assuming the cost of the equipment is $100,000 (so there is a selling profit).
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