George Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $294,191, and its unguaranteed residual value at the end of the lease term is estimated to be $28,500. National will pay annual payments of $41,900 at the beginning of each year and all maintenance, insurance, and taxes. George incurred costs of $162,800 in manufacturing the equipment and $4,850 in negotiating and closing the lease. George has determined that the collectibility of the lease payments is reasonably predictable, that no additional costs will be incurred, and that the implicit interest rate is 10%.

Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

(1)		Lease receivable		$
(2)		Sales price		$
(3)		Cost of sales		$

Prepare a 10-year lease amortization schedule. (Round answers to 0 decimal places e.g. 58,971.)

GEORGE COMPANY (Lessor) Lease Amortization Schedule Annuity Due Basis , Unguaranteed Residual Value
Beginning of Year		Annual Lease Payment Plus Residual Value		Interest on Lease Receivable		Lease Receivable Recovery		Lease Receivable
Initial PV								$
1		$		$		$
2
3
4
5
6
7
8
9
10
End of 10
		$		$		$

Prepare all of the lessors journal entries for the first year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 58,971.)

Account Titles and Explanation	Debit	Credit
(To record the lease.)
(To record payment of the initial direct costs relating to the lease.)
(To record receipt of the first lease payment.)
(To record interest earned during the first year of the lease.)