Question
18) The Metro Company (lessee) leased equipment from Denver Industries on January 1, 2021. Denver (lessor) manufactured the equipment at a cost of $270,000.
18) The Metro Company (lessee) leased equipment from Denver Industries on January 1, 2021. Denver (lessor) manufactured the equipment at a cost of $270,000. Other information: Lease term Annual payments Life of asset Lessor's implicit interest rate Lessee's incremental rate 3 years $120,000 beginning Jan. 1, 2021 3 years 8% 9% Required: Round your answers to the nearest whole dollar amounts. 1. Calculate the amount of lease receivable that Denver would report in this sales-type lease. Round to nearest dollar. Show calculations. If not, no credit. 2. Prepare the appropriate journal entries for Denver on January 1, 2021. Round to nearest dollar. 3. Prepare the adusting journal entry for Denver on December 31, 2021. Round to nearest dollar.
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