Cullumber Corp. is a manufacturer of truck trailers. On January 1, 2021, Cullumber Corp. leases 9 trailers to Vaughn Company under a 7-year noncancelable lease agreement. The following information about the lease and the trailers is provided:

1.		Equal annual payments that are due on January 1 each year provide Cullumber Corp. with an 10% return on net investment.
2.		Titles to the trailers pass to Vaughn at the end of the lease.
3.		The fair value of each trailer is $50,100. The cost of each trailer to Cullumber Corp. is $46,600. Each trailer has an expected useful life of nine years.
4.		Collectibility of the lease payments is probable.

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What type of lease is this for the lessor?

List of Accounts

Calculate the annual lease payment. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.)

Annual lease payment

$

List of Accounts

Prepare a lease amortization schedule for Cullumber Corp. for the first three years. (Round answers to 0 decimal places e.g. 5,275.)

Cullumber Corp. Lease Amortization Schedule (Lessor)
Date		Annual Lease Rental		Interest on Lease Receivable		Lease Receivable Recovery		Lease Receivable
1/1/21								$
1/1/21		$		$		$
1/1/22
1/1/23

List of Accounts

Prepare the journal entries for the lessor for 2021 to record the lease agreement, the receipt of the lease rentals, and the recognition of revenue. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit

	(To record the lease)

	(To record receipt of the first lease payments)