Glaus Leasing Compamy agrees to lease equipment to Jensen Corporation on January $1,2024.$ The following information relates to the lease agreement.

The term of the lease is $7$ years with no renewal option, and the machinery has an estimated economic life of $9$ years.

The cost of the machinery is $$525,000,$ and the fair value of the asset on January $1,2024,$ is $$700,000.$

At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $$50,000.$ Jensen estimates that the expected residual value at the end of the lease term will be $$50,000.$ Jensen amortizes all of its leased equipment on a straight$-$line basis.

The lease agreement requires equal annual rental payments each January $1,$ beginning on January $1,2024.$

The collectibility of the lease payments is probable.

The implicit rate of Interest is $5\%.$

Compute lease payment $($show lessor's calculation$)$:

Complete amortization schedule:

$\backslash$table$[[,$Cash Pmt$,$Eflective interest,Pindigle reduction,$\backslash$table$[[$Outstanding$],[$dalance$]]],[,,,,],[\frac{1}{1}\frac{?}{24},,,,],[\frac{1}{1}\frac{?}{25},,,,],[\frac{1}{1}\frac{?}{26},,,,],[\frac{1}{1}\frac{?}{27},,,,],[\frac{1}{1}\frac{?}{28},,,,],[\frac{1}{1}\frac{?}{29},,,,],[\frac{1}{1}\frac{?}{30},,,,]]$

Prepare lessee's and lessor's journal entries on the following dates:

Jensen $($Lessee$)$

January $1,2024$

December $31,2024$

January $1,2025$

Glaus Leasing Company agrees to lease equipment to Jensen Corporation on January $1,2024.$ The following Information relates to the lease agreement.

$6$

$7$

$8$

The term of the lease is $7$ years with no renewal option, and the machinery has an estimated economic life of $9$ years.

The cost of the machinery is $$525,000,$ and the fair value of the asset on January $1,2024,$ is $$700,000.$

At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $$50,000.$ Jensen estimates that the expected residual value at the end of the lease term will be $$50,000.$ Jensen amortizes all of its leased equipment on a straight$-$line basis.

$9$

$10$

$11$

$12$

$13$

$14$

$15$

$16$

$17$

$18$

$19$

$20$

$21$

$22$

$23$

$24$

$25$

$26$

$27$

$28$

$29$

$2.$ Complete amortization schedule:

The lease agreement requires equal annual rental payments each January $1,$ beginning on January $1,2024.$

The collectibility of the lease payments is probable.

The implicit rate of interest is $5\%.$

Compute lease payment $($show lessor's calculation$)$:

$\backslash$table$[[,$Cash Pmt$,$Effective Interest,Principle reduction,$\backslash$table$[[$Outstanding$],[$Balance$]]],[,,,,],[\frac{1}{1}\frac{?}{24},,,,],[\frac{1}{1}\frac{?}{25},,,,],[\frac{1}{1}\frac{?}{26},,,,],[\frac{1}{1}\frac{?}{27},,,,],[\frac{1}{1}\frac{?}{28},,,,],[\frac{1}{1}\frac{?}{29},,,,],[\frac{1}{1}\frac{?}{30},,,,]]$

$30$

$31$

$32$

$33$

$34$

$35$

$36$

$37$

$38$

$3.$ Prepare lessee's and lessor's journal entries on the following dates:

$$ Jensen $($Lessee$)$

$\backslash$table$[[$Glaus $($Lessor$)]]$

January $1,2024$

December $31,2024$

January $1,2025$