Lamplighter Company, the lessor, agrees to lease equipment to Tilson Company, the lessee, beginning January $1,2019.$ The lease terms, provisions, and related events are as follows:

The lease is noncancelable and has a term of $8$ years.

The annual rentals are $$32,000,$ payable at the end of each year

Tilson agrees to pay all executory costs directly to a third party.

The interest rate implicit in the lease is $14\%.$

The cost of the equipment to the Lamplighter is $$110,000.$ The fair value of the equipment is $$155,000.$

Lamplighter incurs no material initial direct costs.

Lamplighter expects to collect all lease payments

Lamplighter estimates that the fair value at the end of the lease term will be $$20,000$ and that the economic life of the equipment is $9$ years. This value is not guaranteed by the Tilson.

Required:

Calculate the selling price implied by the lease.

Next Level State why this is a sales$-$type lease.

Prepare a table summarizing the lease receipts and interest income earned by the lessor for this sales$-$type lease.

Prepare an accretion schedule for the unguaranteed residual asset.

Prepare journal entries for Lamplighter for the years $2019,2020,$ and $2021.$

Next Level Prepare partial balance sheets for Lamplighter for December $31,2019,$ and December $31,2020,$ showing how the accounts should be disclosed. Use the change in present value approach to classify the lease receivable as current and noncurrent.