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Exercise 21-11 The following facts pertain to a non-cancelable lease agreement between Windsor Leasing Company and Wildhorse Company, a lessee. May 1, 2020 Commencement date
Exercise 21-11 The following facts pertain to a non-cancelable lease agreement between Windsor Leasing Company and Wildhorse Company, a lessee. May 1, 2020 Commencement date Annual lease payment due at the beginning of each year, beginning with May 1, 2020 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2020 Lessor's implicit rate Lessee's incremental borrowing rate $19,656.69 $7,000 5 years 10 years $65,000 $93,000 6% 6 % The collectibility of the lease payments by Windsor is probable. Click here to view factor tables. Compute the amount of the lease receivable at commencement of the lease. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answer to 2 decimal places, e.g. 5,275.15.) Lease receivable at commencement Prepare a lease amortization schedule for Windsor for the 5-year lease term. (Round answers to 2 decimal places, e.g. 5,275.15.) WINDSOR LEASING COMPANY (Lessor) Lease Amortization Schedule Interest on Lease Recovery of Lease Receivable Receivable Annual Lease Payment Plus Lease Receivable Date 5/1/20 5/1/20 5/1/21 5/1/22 5/1/23 5/1/24 4/30/25 Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2020 and 2021. The lessor's accounting period ends on December 31. Reversing entries are not used by Windsor. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To record the lease) (To record lease payment) SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Suppose the collectibility of the lease payments was not probable for Windsor. Prepare all necessary journal entries for the company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15.) Debit Credit Date Account Titles and Explanation 5/1/20
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