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Current Attempt in Progress Assume that on January 1 , 2 0 2 0 , Elmer's Restaurants sells a computer system to Oriole Finance Co
Current Attempt in Progress Assume that on January Elmer's Restaurants sells a computer system to Oriole Finance Co for $ and immediately leases the computer system back. The relevant information is as follows. The computer was carried on Elmer's books at a value of $ The term of the noncancelable lease is years; title will not transfer to Elmer's, and the expected residual value at the end of the lease is $ all of which is unguaranteed. The lease agreement requires equal rental payments of $ at the beginning of each year. The incremental borrowing rate for Elmer is Elmer is aware that Oriole Finance Co set the annual rental to insure a rate of return of The computer has a fair value of $ on January and an estimated economic life of years. Prepare the journal entries for both the lessee and the lessor for to reflect the sale and leaseback agreement. For calculation purposes, use decimal places as displayed in the factor table provided and round answers to decimal places, eg Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Click here to view factor tables. Date Account Titles and Explanation Elmer's Restaurants Lessee Debit Credit
Current Attempt in Progress
Assume that on January Elmer's Restaurants sells a computer system to Oriole Finance Co for $ and immediately
leases the computer system back. The relevant information is as follows.
The computer was carried on Elmer's books at a value of $
The term of the noncancelable lease is years; title will not transfer to Elmer's, and the expected residual value at the end of
the lease is $ all of which is unguaranteed.
The lease agreement requires equal rental payments of $ at the beginning of each year.
The incremental borrowing rate for Elmer is Elmer is aware that Oriole Finance Co set the annual rental to insure a rate
of return of
The computer has a fair value of $ on January and an estimated economic life of years.
Prepare the journal entries for both the lessee and the lessor for to reflect the sale and leaseback agreement. For calculation
purposes, use decimal places as displayed in the factor table provided and round answers to decimal places, eg
Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in
the order presented in the problem.
Click here to view factor tables.
Date
Account Titles and Explanation
Elmer's Restaurants Lessee
Debit
Credit
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