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23 CAPITALLEASE Equipment leased at the end of year for years with equipment ide of9 years Aniual lease payments payable in advance s soo Present

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23 CAPITALLEASE Equipment leased at the end of year for years with equipment ide of9 years Aniual lease payments payable in advance s soo Present value of lease payments 650 oral Mabity balance at end of year interest rat- 10% Date Payment C 615 24 OPERATING LEASE Rental payments Rental revenue for year 1 Life of lease 25 SALE TYPE LEASE $ 230 180 27 10 Fair market value at lease date Cost Annual payments payable in advance Lease years 9% Incremental borrowing rate Amount of financial revenue A 40 Lessee (unearned interest) B S0 Lease payment receivable 90 Fair market value D 180 OURNAL ENTRY A Accounts payable 8 Accounts receivable C Cash 3 pt each F Interest expense G Inventory H Leased asset 1 Leased payment receivable J Obligation under capital lease K Pension cost L Retained earnings M Sales D Common stock E Cost of goods sold DEBIT CREDIT I M Example csh sale of 10 26 Lessee recorded capital lease for $ 25o 27 Lessee made $ 50 payment Interest $ 30 Capital lease

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