Accounting Chapter 21

Alpha Company, a machincry dealer, leased a machine to Omega Corporation on January 1, 2020. The first payment is reccived on January 1, 2020. Collectability of lease payments by Alpha is probable. The machine has no residual value and reverts to Alpha at the termination of the lease. Information concerning the lease appears below. Lease term in years Annual payments at the beginning of each year Cost of purchasing machine during 2019 by Alpha Rate used by Alpha to set the annual rental payment Economic life of machine in years $ $ 35.004 160,000 6% 10 Instructions: (a) Compute the amount of the lease receivable using Excel's present value function. (b) Prepare all necessary journal entries for Alpha for 2020. Debit Credit 1 2 3 4 5 6 8 9 30 31 32 33 34 35 36 37