Sage Company manufactures a check-in kiosk with an estimatedeconomic life of 12 years and leases it to National Airlines for aperiod of 10 years. The normal selling price of the equipment is$256,191, and its unguaranteed residual value at the end of thelease term is estimated to be $21,100. National will pay annualpayments of $36,700 at the beginning of each year and allmaintenance, insurance, and taxes. Sage incurred costs of $191,800in manufacturing the equipment and $3,600 in negotiating andclosing the lease. Sage has determined that the collectibility ofthe lease payments is reasonably predictable, that no additionalcosts will be incurred, and that the implicit interest rate is10%.
Compute the amount of each of the following items.
1. Lease Receivable
2. Sales price
3. Cost of Sales
Prepare a 10-year lease amortization schedule
Beg of year...Annual lease pmt pluse res val...interest....leasereceiv recovery.....lease receivable
1
2
3
4
5
6
7
8
9
10
totals
Prepare all of the lessorâs journal entries for the firstyear
Sage Company manufactures a check-in kiosk with an estimatedeconomic life of 12 years and leases it to National Airlines for aperiod of 10 years. The normal selling price of the equipment is$256,191, and its unguaranteed residual value at the end of thelease term is estimated to be $21,100. National will pay annualpayments of $36,700 at the beginning of each year and allmaintenance, insurance, and taxes. Sage incurred costs of $191,800in manufacturing the equipment and $3,600 in negotiating andclosing the lease. Sage has determined that the collectibility ofthe lease payments is reasonably predictable, that no additionalcosts will be incurred, and that the implicit interest rate is10%.
Compute the amount of each of the following items.
1. Lease Receivable
2. Sales price
3. Cost of Sales
Prepare a 10-year lease amortization schedule
Beg of year...Annual lease pmt pluse res val...interest....leasereceiv recovery.....lease receivable
1
2
3
4
5
6
7
8
9
10
totals
Prepare all of the lessorâs journal entries for the firstyear