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3. Tempo Industries is an 80%-owned subsidiary of Dalie Inc. On January 1, 2017, Dalie leased an asset to Tempo and the following journal entries
3. Tempo Industries is an 80%-owned subsidiary of Dalie Inc. On January 1, 2017, Dalie leased an asset to Tempo and the following journal entries were made: Tempo 1 21,561 Assets Under Capital Lease Cash Obligations Under Capital Lease 5.000 16,561 Dalie Minimum Lease Payments Receivable 20,000 Cash 5,000 Unearned Interest Income 3,439 Asset (cost of asset leased) 18,000 Sales Profit on Leases 3,561 The terms of the lease agreement require Tempo to make five payments of $5,000 each at the beginning of each year. The implicit interest rate used by both Dalie and Tempo is 8%. Required: Prepare the eliminations and adjustments required by the intercompany lease on the partial worksheet below of December 31, 2017. Also write out the journal entries with explanations
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