Question
Recording Sales-Type Lease Journal Entries No Residual Value Franklin Co. leased its manufactured equipment to Parker Inc. for a 4-year term. Franklin Co. reported a
Recording Sales-Type Lease Journal Entries No Residual Value
Franklin Co. leased its manufactured equipment to Parker Inc. for a 4-year term. Franklin Co. reported a book value of $55,000 for the equipment in its inventory account. The lease commenced on January 1, 2020, with the first annual payment of $18,500 due immediately. The equipment has a useful life of 4 years, an estimated fair value of $68,880, and no residual or salvage value. The implicit rate of the lease is 5% and collectability of the lease payments from Parker is probable. Record Franklins journal entries at the commencement of the sales-type lease.
- Note: Round your answers to the nearest whole dollar.
- Note: List multiple debits or credits (when applicable) in alphabetical order.
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