Hayes Corp, is a manufacturer of truck trailers. On January Hayes Corp. leases ten
trallers to Lester Company under a sixyear noncancelable lease agreement. The following
information about the lease and the trailers is provided:
Equal annual payments that are due on January each year provide Hayes Corp. with an
return on net investment present value factor for periods at is
Titles to the trailers pass to Lester at the end of the lease.
The fair value of each trailer is $ The cost of each trailer to Hayes Corp. is
$ Each trailer has an expected useful life of nine years.
Collectibility of the lease payments is probable.
Instructions:
What type of lease is this for the lessor? Explain how you made the determination.
Calculate the annual lease payment. Round to nearest dollar.
Prepare a lease amortization schedule for Hayes Corp. for the first three years.
Prepare the journal entries for the lessor for to record the lease agreement, the
receipt of the lease rentals, and the recognition of revenue assume the use of a
perpetual inventory method and round all amounts to the nearest dollar
