please check your work and the red are wrong i have sumites it 2 times
Current Attempt in Progress Winston Industries and Ewing Inc. enter into an agreement that requires Ewing inc. to build three diesel-electric engines to Winston's specifications. Upon completion of the engines, Winston has agreed to lease them for a period of 10 years and to assume all costs and risks of ownership. The lease is non-cancelable becomes effective on January 1, 2020 and requires annual rental payments of $384.532 each January 1, starting January 1, 2020. Winston's incremental borrowing rate is 8%. The implicit terest rate used by Ewing and known to Winston is 6%. The total cost of building the three engines is $2,600,000. The economic list of the engines is estimated to be 10 years, with residual value set at zero. Winston depreciates similar equipment on a straight-line basis. At the end of the lease, Winston assumes title to the engines. Collectibility of the lease payments is probable. Click here to view factor tables. (a) Your answer is correct Discuss the nature of this lease transaction from the viewpoints of both lessee and lessor. The lease should be treated as a finance lease by Winston Industries The lease should be treated as a sales-type lease by Ewing Inc. e Textbook and Media List of Accounts Attempts: 2 of 4 used (b), (c) and (d) Your answer is partially correct. (b) Prepare the journal entry to record the transaction on January 1, 2020, on the books of Winston (the lessee). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to decimal places eg. 58,971) Your answer is partially correct. (b) Prepare the journal entry to record the transaction on January 1, 2020, on the books of Winston (the lessee). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to decimal places e s. 58,971.) Account Tities and Explanation Debit Credit Property Tax Expense 2400000 Lease Expense 2400000 (c) Prepare the journal entry to record the transaction on January 1, 2020, on the books of Ewing (the lessor). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts. Round answers to decimal places eg. 58,971.) Account Titles and Explanation Debit Credit Lease Receivable 2830189 Cost of Goods Sold 2400000 Property Tax Payable 2400000 2830189 Lease Revenue (d) Prepare the journal entries for both the lessee and lessor to record the first rental payment on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Debit Credit Account Titles and Explanation Lessee (January 1, 2020) Debit Credit Lessor January 1, 2020) (e1) The parts of this question must be completed in order. This part will be available when you complete the part above (e2) The parts of this question must be completed in order. This part will be available when you complete the part above (f) The parts of this question must be completed in order. This part will be available when you complete the part above The parts of this question must be completed in order. This part will be available when you complete the part about
