Q8 Reporting a Sales-Type LeaseLessor On January 1 of Year 1, Ashe Company entered into a five-year equipment lease (with no renewal options) requiring payments of $8,000, with the first payment due immediately. The lessors implicit interest rate, known to Ashe, is 6%. Ownership of the equipment remains with the lessor at expiration of the lease. There is no option to purchase the property at the end of the lease term and the equipment is expected to have no residual value. The equipment has an estimated economic life of five years. Answer the following questions from the lessors perspective, assuming that leased equipment was carried in the lessors financial records at $28,800. Required a. Calculate the value of the lease receivable at the commencement of the lease. b. Prepare a schedule of the lease receivable for the lessor for the lease term. c. Prepare journal entries on January 1 and December 31 of Year 1 and Year 2 for the lessor. d. What amounts would be presented related to this lease in the lessors balance sheet as of December 31 of Year 1? e. What amounts would be presented related to this lease in the lessors income statement for the year ended December 31 of Year 1?

On January 1 of Year 1, Ashe Company entered into a five-year equipment lease (with no renewal options) requiring payments of $8,000, with the first payment due immediately. The lessor's implicit interest rate, known to Ashe, is 6%. Ownership of the equipment remains with the lessor at expiration of the lease. There is no option to purchase the property at the end of the lease term and the equipment is expected to have no residual value. The equipment has an estimated economic life of five years. Answer the following questions from the lessor's perspective, assuming that leased equipment was carried in the lessor's financial records at $28,800. Required a. Calculate the value of the lease receivable at the commencement of the lease. - Note: Round your answer to the nearest whole dollar. b. Prepare a schedule of the lease receivable for the lessor for the lease term. - Note: Round each amount in the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. c. Prepare journal entries on January 1 and December 31 of Year 1 and Year 2 for the lessor. - Note: Round your answers to the nearest whole dollar. d. What amounts would be presented related to this lease in the lessor's balance sheet as of December 31 of Year 1 ? - Note: Round your answers to the nearest whole dollar. e. What amounts would be presented related to this lease in the lessor's income statement for the year ended December 31 of Year 1 ? - Note: Round your answers to the nearest whole dollar. - Note: Do not use negative signs with your answers