Exercise 21A-5 a-c Tamarisk Leasing Company signs an agreement on January 1, 2017, to lease equipment to Cole Company. The following information relates to this agreement. 1 2. 3. 4. 5. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. The cost of the asset to the lessor is $291,000. The fair value of the asset at January 1, 2017, is $291,000 The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $29,100, none of which is guaranteed The agreement requires equal annual rental payments, beginning on January 1, 2017 Collectibility of the lease payments by Tamarisk is probable. Your answer is correct. Assuming the lessor desires a 8% rate of return on its investment, calculate the amount of the annual rental payment required. For calculation purposes, use 5 decimal places as displayed in the factor table provided and the final answer to 0 decimal places e.g. 5,275.) Amount of the annual rental payment 54612 SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT Your answer is correct. Prepare an amortization schedule that is suitable for the lessor for the lease term. (Round answers to O decimal places e.g. 5,275.) TAMARISK LEASING COMPANY (Lessor) Schedule Interest on Lease Recovery of Lease Annual Lease Payment Plus URV able Date Receivable Lease Receivable 291000 54612 5461 236388 54612 18911 35701 200687 162130 54612 16055 38557 54612 1/1/20 1/1/21 1/1/22 12/31/22 12970 41642 120488 54612 9639 4497 75515 54612 6041 48571 26944 29100 2156 26944 2910 356772 65772 SHOW LIST OF ACCOUNTS SHOW ANSWER LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Prepare all of the journal entries for the lessor for 2017 and 2018 to record the lease agreement, the receipt of lease payments, and the recognition of revenue. Assume the lessor's annual accounting period ends on December 31, and it does not use reversing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 1/1/17 Lease Receivable 291000 Cost of Goods Sold Inventory 291,000 Sales Revenue (To record the lease) 1/1/17 Cash 54612 54612 Lease Rece vable To record the receipt of lease payment) 12/31/17 Lease Receivable 18911 18911 Interest revenue 1/1/18 Cash 54612 54612 Lease Rece vable 12/31/18 Lease Receivable 16055 16055 Interest revenue Click if you would like to Show Work for this question: Open Show Work