Problem 21A-9 a2-c

Whispering 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 $298,352, and its unguaranteed residual value at the end of the lease term is estimated to be $18,300. National will pay annual payments of $40,000 at the beginning of each year. Whispering incurred costs of $185,300 in manufacturing the equipment and $3,700 in sales commissions in closing the lease. Whispering has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 8%.

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 answers to 0 decimal places, e.g. 5,275.)

(1) Lease receivable

(2) Sales Price

(3) Cost of Sales

Prepare a 10-year lease amortization schedule for Whispering, the lessor.

WHISPERING COMPANY (Lessor) Lease Amortization Schedule Annuity Due Basis, Unguaranteed Residual Value
Beginning of Year		Annual Lease Payment Plus Residual Value		Interest on Lease Receivable		Lease Receivable Recovery		Lease Receivable

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

(To record the sale and the cost of goods sold in the lease transaction.)

(To record payment of the initial direct costs relating to the lease.)

(To record receipt of the first lease payment.)

(To record interest earned during the first year of the lease.)