Question
Nash Leasing Company agrees to lease equipment to Crane Corporation on January 1, 2020. The following information relates to the lease agreement. 1. The term
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Calculate the amount of the annual rental payment required.
Compute the value of the lease liability to the lessee.
Prepare the journal entries Crane would make in 2020 and 2021 related to the lease arrangement.
Prepare the journal entries Nash would make in 2020 and 2021 related to the lease arrangement.
Suppose Crane expects the residual value at the end of the lease term to be $35,000 but still guarantees a residual of $45,000. Compute the value of the lease liability at lease commencement.
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