LESSEE

LESSOR

On December 31, 2021, Rhone-Metro Industries leased equipment to Western Soya Co. for a four-year period ending December 31, 2025, at which time possession of the leased asset will revert back to Rhone-Metro. The equipment cost Rhone-Metro $610,523 and has an expected useful life of six years. Its normal sales price is $610,523. The lessee-guaranteed residual value at December 31, 2025, is $26,000. Equal payments under the lease are $170,000 and are due on December 31 of each year. The first payment was made on December 31, 2021. Western Soya's incremental borrowing rate is 13%. Western Soya knows the interest rate implicit in the lease payments is 10%. Both companies use straight-line depreciation. Use (FV of $1, PV of $1, FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the appropriate entries for Western Soya Co. on December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record lease. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2021 Record entry Clear entry View general journal Prepare the appropriate entries for Western Soya Co. on December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record cash payment. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2021 Record entry Clear entry View general journal Prepare the appropriate entries for Rhone-Metro on December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record lease. Note: Enter debits before credits. Ge General Journal Debit Credit Date December 31, 2021 Record entry Clear entry View general journal Prepare the appropriate entries for Rhone-Metro on December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record cash received. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2021 Record entry Clear entry View general journal