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QUESTION 11 Penny manufactured a new car at a cost of $20,000 and leased it to Leonard on February 1, 2013. The lease calls for
QUESTION 11 Penny manufactured a new car at a cost of $20,000 and leased it to Leonard on February 1, 2013. The lease calls for 4 equal annual payments of $6,989 on February 1st of each year including the year of lease inception. The car has a remaining useful life of 4 years and a salvage value of zero. The lease does not have a bargain purchase option. Collectibility of payments is reasonably certain. The lessor uses a rate of return of 89. The PV factor for an annuity due for 4 periods at 896 interest is 3.57710. Prepare the appropriate journal entries for Penny at the inception of the lease (i.e., February 1, 2013). Make sure to write Dr. or Cr. before each line, indent credits, and write amounts rounded to the nearest dollar. TT T Arial 3 (12pt) T - - E- H e 's Path:p Words:0 QUESTION 12 Bonus Question - You can earn 1 additional bonus point for this question. Casio Corp. manufactured a gold-plated, diamond-studded calculator for Justin Beiber's new job as an auditor at PW-KPM-E&D. The calculator cost $3.5 million to manufacture and Casio wants to earn a gross profit margin from the sale of the calculator of 20%. Casio leased the calculator using a 16-year lease (Justin is going for partner so he will be there a long time with semi-annual lease payments. The first lease payment is due at the lease inception date. Casio has a required rate of return (for interest) of 6%. They expect that the calculator will be worth $.5 million at the end of the lease, but the residual value is not guaranteed. What is the lease payment amount that Casio uses for this lease
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