Instructions

Ramsey Company leases heavy equipment to Terrell Inc. on March $1,$ Year $1,$ on the following terms:

Twenty$-$four lease rentals of $$2,950$ at the beginning of each month are to be paid by Terrell, and the lease is noncelable.

The cost of the heavy equipment to Ffamsey was $$55,000.$

Ramsey uses an implicit interest rate of $18\%$ per year and will account for this lease as a sales$-$type lease.

Required:

Prepare journal entries for Ramsey $($the lessor$)$ to record the lease contract on March $1,$ Year $1,$ the receipt of the first two lease rentals, and any interest income for March and April Year $1.($Round your answers to the nearest dollar.$)$

Present Value Tables

Instructions

General Journal

Generaytournal Instructions

Record separate entries for the lease contract and the

PAGE $1$

receipt of the first lease payment. Record interest on a monthly basis.

Refer to the Chart of Accounts for the exact wording of the account titles and account numbers.

CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries.