(c) Prepare all of the lessor's journal entries for the first year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 0 decimal places e.g. 5,275.) No. Account Titles and Explanation Debit Credit 1. (To record the lease.) (To record direct costs Incurred on account.) 2. (To record receipt of the first lease payment.) 3. (To record interest earned during the first year of the lease.) eTextbook and Media List of Accounts Save for Later Attempts: 0 of 4 used Submit Arrwer Using multiple attempts will impact your score. 50% score reduction after attempt 3Question 3 of 6 3.33 /5 View Policies Show Attempt History Current Attempt in Progress Martinez Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $471,096, and its guaranteed residual value at the end of the non- cancelable lease term is estimated to be $15,900. The hospital will pay rents of $56,900 at the beginning of each year. Martinez incurred costs of $263,000 in manufacturing the machine and $13,400 in legal fees directly related to the signing of the lease. Martinez has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Click here to view factor tables. (a) Your answer is correct. Discuss the nature of this lease in relation to the lessor. The nature of this lease in relation to the lessor is sales-type lease Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places. eg. 1.25124 and the final answers to O decimal places, eg. 5,275.) (1) Lease receivable at commencement of the lease 3 471,094 (2) Sales price 471,094 Cost of sales 263,000 eTextbook and Media List of Accounts Attempts: 2 of 4 used Using multiple attempts will impact your score. 50% score reduction after attempt 3 (b) Your answer is correct. Prepare a 10-year lease amortization schedule for Martinez, the lessor. (Round answers to O decimal places eg. 5,275) MARTINEZ INC. (Lessor) Lease Amortization Schedule [Annuity due basis, guaranteed residual value] Beginning Annual Lease Payment Interest on Recovery of Lease of Year Plus Residual Value Lease Receivable Receivable Initial PV $ 56,900 2 36,900 20,710 3 36,900 18,900 4 56,900 17,000 36,900 15,005 36,900 12,911 7 36,900 10,711 56,900 8,402 36,900 5,977 56,900 3,431 End of 10 15,900 757 384,900 113,804 471, eTextbook and Media List of Accounts Attempts: 3 of 4 used Using multiple attempts will impact your score. 50%% score reduction after attempt 3Lease Receivable 471.096 414.196 278,004 340.000 300,100 258,212 214,222 EED BOI 119,535 68,412 15,142
