A lease agreement between Mooney Leasing and Choi Group is described in E21.10.
Instructions
Refer to the data in E21.10 and do the following for the lessor. (Round all numbers to the nearest yen)
a. Discuss the nature of this lease to Mooney and compute the amount of the lease receivable at commencement of the lease.
b. Prepare a lease amortization schedule for Mooney for the 5-year lease term.
c. Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2019 and 2020. The lessor's accounting period ends on December 31. Reversing entries are not used by Mooney.
d. Suppose the collectibility of the lease payments was not probable for Mooney. Prepare all necessary journal entries for the company in 2019.