Question
Kingbird Leasing Company signs an agreement on January 1, 2017, to lease equipment to Cole Company. The following information relates to this agreement. 1. The
Kingbird Leasing Company signs an agreement on January 1, 2017, to lease equipment to Cole Company. The following information relates to this agreement.
1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years.
2. The cost of the asset to the lessor is $251,000. The fair value of the asset at January 1, 2017, is $251,000.
3. 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 $25,490, none of which is guaranteed.
4. The agreement requires equal annual rental payments, beginning on January 1, 2017.
5. Collectibility of the lease payments by Kingbird is probable.
I need the last bit of the amortization schedule (with explanation of how you get those numbers please) and help with the red journal entry! Thanks!
KINGBIRD LEASING COMPANY (Lessor) Lease Amortization Schedule Annual Lease Payment Plus Interest on Lease Recovery of Lease eceivable ceivable Lease Receivable Date 251000 47056 203944 0 47056 47056 16316 30740 173204 33200 47056 13856 140004 11200 1/1/20 1/1/21 1/1/22 12/31/22 47056 35856 104148 47056 8332 38724 65424 47056 41822 23602 5234 1180 23602 24782 0 307118 56118 251000 1/1/17Lease Receivable 251000 16063 Cost of Goods Sold 251000 Sales Revenue 16063 Inventory To record the lease) 1/1/17Cash 47056 47056 Lease Receivable To record the receipt of lease payment) 12/31/17Lease Receivable 16316 16316 Interest Revenue 1/1/18 Cash 47056 47056 Lease Receivable 12/31/18 Lease Receivable 13856 13856 Interest RevenueStep by Step Solution
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