Flagstaff, a lessor, entered into a sales-type lease with another company on January 1, 2016. The lease was for four years with $40,000 payments due at the end of each year. The cost of the equipment on Flagstaff's books was $120,000. Actuarial information for 7%, the implicit rate, follows: Amount of $1 Amount of annuity of $1 Present value of $1 Present-value of annuity of $1 3 Periods 4 Periods 1.2250 (1) What would be the charge to Cost of Asset Leased? (2) What would be the charge to the initial gross receivable? (3) What would be the credit to Sales? 3.1249 0.8163 2.6243 1.3108 4.4399 0.7629 3.3872 Required: a. Prepare all journal entries for Flagstaff for the year 2016. b. Use the same information as above, but assume that there is an unguaranteed residual value of $8,000. Answer the following questions:

Flagstaff, a lessor, entered into a sales-type lease with another company on January 1,2016. The lease was for four years with $40,000 payments due at the end of each year. The cost of the equipment on Flagstaffs books was $120,000. Actuarial information for 7%, the implicit rate, follows: Required: a. Prepare all journal entries for Flagstaff for the year 2016. b. Use the same information as above, but assume that there is an unguaranteed residual value of $8,000. Answer the following questions: (1) What would be the charge to Cost of Asset Leased? (2) What would be the charge to the initial gross receivable? (3) What would be the credit to Sales