Lessor Computations and Entries, Sales$-$Type Lease with Guaranteed Residual Value$)$ Amirante Inc. manufactures an X$-$ray machine with an estimated life of $12$ years and leases it to Chambers Medical Center for a period of $10$ years. The normal selling price of the machine is $$495,678,$ and its guaranteed residual value at the end of the non$-$cancelable lease term is estimated to be $$15,000.$ The hospital will pay rents of $$60,000$ at the beginning of each year. Amirante incurred costs of $$300,000$ in manufacturing the machine and $$14,000$ in legal fees directly related to the signing of the lease. Amirante has determined that the collectibility of the lease payments is probable and that the implicit interest rate is $5\%.$

Instructions

Discuss the nature of this lease in relation to the lessor and compute the amount of each of the following items.

Lease receivable at commencement of the lease.

Sales price.

Cost of sales.

Prepare a $10-$year lease amortization schedule for Amirante, the lessor.

Prepare all of the lessor$$s journal entries for the first year