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plz solve, thanks! On December 31, 20 Y1, Lopez Company (lessee) signed a 2-year, noncancelable lease for the use of manufacturing equipment now owned by
plz solve, thanks!
On December 31, 20 Y1, Lopez Company (lessee) signed a 2-year, noncancelable lease for the use of manufacturing equipment now owned by Zinger, Inc. (lessor). The lease expires December 31,20Y3 and has the following terms: - Annual contractual payments of $28,231 each December 31. The first payment is due December 31,20Y1. - No down payment; No purchase option. - The asset's FMV at 12/31/Y1 is $60,000. - Lopez does not guarantee any residual value at 12/31/Y3. - Lopez can borrow at 5% per year for a 2-year loan; Lopez is unaware of Zinger's 4% desired retum rate. - The estimated useful life of the asset is 3 years. REQUIRED Use the following templates to show how the above lease transaction impacted Lopez's cash flows, income statement, and balance sheet for the years 20Y1-20Y3. Round all amounts to the nearest whole dollar. The impact on the balance sheet should reflect cumulative changes to the statement. These amounts will not necessanly equal the December 31 ending balances in the balance sheet accounts. Some lines might not have answers. List account names or transaction descriptions in the first column and amounts in the remaining columns. CUMULATIVE IMPACT ON BALANCE SHEET ELEMENTS Step by Step Solution
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