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Exercise 21-9 The following facts pertain to a noncancelable lease agreement between Crane Leasing Company and Cheyenne Company, a lessee. Inception date: May 1, 2017
Exercise 21-9 The following facts pertain to a noncancelable lease agreement between Crane Leasing Company and Cheyenne Company, a lessee. Inception date: May 1, 2017 Annual lease payment due at the beginning of each year, beginning with May 1, 2017 $19,153.46 Bargain-purchase option price at end of lease term $4,300 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $69,000 Fair value of asset at May 1, 2017 $84,000 Lessor's implicit rate 9% Lessee's incremental borrowing rate The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs. Click here to view factor tables Compute the amount of the lease receivable at the inception of the lease. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and Round answers to 2 decimal places, e.g. 16.25.) Lease receivable at inception SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare a lease amortization schedule for Crane Leasing Company for the 5-year lease term. (Round answers to 2 decimal places, e.g. 16.25.) CRANE LEASING COMPANY (Lessor) Lease Amortization Schedule Annual Lease Payment Plus Interest on Lease Recovery of Lease Receivable Receivable Date Lease Receivable 5/1/17 5/1/17 5/1/18 5/1/19 5/1/20 5/1/21 4/30/22 SHOW LIST OF ACCOUNTS LINK TO TEXT 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 2017, 2018, and 2019. The lessor's accounting period ends on December 31. Reversing entries are not used by Crane. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 16.25.) Date Account Titles and Explanation Debit Credit 5/1/17 (To record the lease.) (To record lease payment. ) SHOW LIST OF ACCOUNTS LINK TO TEXT
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