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only need help with problem 2 and 3 Advanced Accounting II Chapter 21 - Leases Problem 1. Watt Financing leased a packing machine to Nuts
only need help with problem 2 and 3 Advanced Accounting II Chapter 21 - Leases Problem 1. Watt Financing leased a packing machine to Nuts Company. The noncancelable lease requires lease payments of $50,000 per year, payable in advance, over a five-year period. Nuts' incremental borrowing rate is 13%. Watt's implicit interest rate (known to Nuts) is 11%. The lease term begins on January 1, 2019. The machine's economic life is 10 years with a cost of $200,000 and fair value of $235,000. The collectability of the lease payments is probable for the lessor. Assuming that there is a guaranteed residual value of $20,000 to Watt. Instructions Provide the journal entries required on both Watt's and Nuts' books through December 31, 2020. Problem 2. Same as Problem 1. Assuming that there is a bargain purchase option of $20,000 for Nuts. Instructions Provide the journal entries required on both Watts and Nuts' books through December 31, 2020. Problem 3. Same as Problem 1. Now assuming that the residual value of $20,000 is NOT guaranteed. Instructions Provide the journal entries required on both Watts and Nuts' books through December 1 20707
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