Crane Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020 The lease is for an 8 year period and requires equal annual payments of $32,359 at the beginning of each year The first payment is received on January 1, 2020 Crane had purchased the machine during 2016 for $140,000 Collectibility of lease payments by Crane is probable Crane set the annual rental to ensure a 6 rate of return The machine has an economic life of 10 years with no residual value and reverts to Crane at the termination of the lease Compute the amount of the lease receivable (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places e g 5,275 ) Amount of the lease receivable $ 213,000 Prepare all necessary journal entries for Crane for 2020 (Credit account titles are automatically indented when amount is entered Do not indent manually Round answers to 0 decimal places e g 5,275 ) Date Account Titles and Explanation Debit Credit 1 1 20 Lease Receivable 213,000 Cost of Goods Sold 140,000 Sales Revenue 213,000 Inventory 140,000 (To record the lease) Cash 32,359 Lease Receivable 32,359 (To record the first lease payment) 12 31 20 Lease Receivable 10,839 Interest Revenue 10,839 Suppose the collectibility of the lease payments was not probable for Crane Prepare the necessary journal entry for the company in 2020 (Credit account titles are automatically indented when amount is entered Do not indent manually ) Date Account Titles and Explanation Debit Credit 1 1 20 Suppose at the end of the lease term, Crane receives the asset and determines that it actually has a fair value of $1,320 instead of the anticipated residual value of $0 Record the entry to recognize the receipt of the asset for Crane at the end of the lease term (Credit account titles are automatically indented when amount is entered Do not indent manually Round answers to 0 decimal places e g 5,275 ) Date Account Titles and Explanation Debit Credit 1 1 20

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Crane Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-year period and requires equal

Crane Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-year period and requires equal annual payments of $32,359 at the beginning of each year. The first payment is received on January 1, 2020. Crane had purchased the machine during 2016 for $140,000. Collectibility of lease payments by Crane is probable. Crane set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Crane at the termination of the lease.

Compute the amount of the lease receivable. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places e.g. 5,275.)

Amount of the lease receivable

$ 213,000

Prepare all necessary journal entries for Crane for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
1/1/20	Lease Receivable	213,000
	Cost of Goods Sold	140,000
	Sales Revenue		213,000
	Inventory		140,000
	(To record the lease)
	Cash	32,359
	Lease Receivable		32,359
	(To record the first lease payment)
12/31/20	Lease Receivable	10,839
	Interest Revenue		10,839

Suppose the collectibility of the lease payments was not probable for Crane. Prepare the necessary journal entry for the company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
1/1/20

Suppose at the end of the lease term, Crane receives the asset and determines that it actually has a fair value of $1,320 instead of the anticipated residual value of $0. Record the entry to recognize the receipt of the asset for Crane at the end of the lease term. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.)