Question
On Januray 1, 2017, Sony Corporation sold machine with a book value of $112,000 to Speedy Finance for $140,000 and immediately leased it back. -The
On Januray 1, 2017, Sony Corporation sold machine with a book value of $112,000 to Speedy Finance for $140,000 and immediately leased it back.
-The term of the lease is 3 years, and the machine has a useful life of 5 years. There is no bargain purchase option, and title dose not tranfer to Sony at lease end.
-The lease requires three equal payment of $34, 784 on December 31.
-The implicit rate of interest is 6%.
-The unguaranteed residual value is expected to be $56,000.
-Prepare the 2017 journal entries for Sony Corporation and the journal entries for Speedy Finance.
I think there should be a gain of $28,000 and that the ROU Asset $92,978. Please show all of your work, will thumbs up!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started