Problem 21-10 Cheyenne Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $280,968, and its unguaranteed residual value at the end of the lease term is estimated to be $19,300. National will pay annual payments of $39,000 at the beginning of each year and all maintenance, insurance, and taxes. Cheyenne incurred costs of $197,000 in manufacturing the equipment and $4,300 in negotiating and closing the lease. Cheyenne has determined that the collectibility of the lease payments is reasonably predictable, that no additional costs will be incurred, and that the implicit interest rate is 9%.

Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

(1)

Lease receivable_____

(2)

Sales price______

(3)

Cost of sales________

Prepare a 10-year lease amortization schedule.

Prepare all of the lessors journal entries for the first year.