Reporting a Sales-Type Lease-Lessor On January 1, 2020, the first day of its accounting year, Lessor Inc., leased certain equipment at an annual payment of $10,254.19, receivable at the beginning of each year for 10 years. The first payment was received immediately. The equipment has an estimated useful life of 12 years and no residual value. Lessor's implicit rate is 6%. Lessor had no other costs associated with this lease and properly classified the lease as a sales- type lease. The leased equipment was carried on Lessor Inc.'s books at $65,000. Required a. Calculate the value of the lease receivable at the commencement of the lease. Note: Round answer to the nearest dollar. Note: Do not use a negative sign with your answer. Lease receivable $ 80,000 b. What amounts would be presented in the balance sheet as of December 31, 2020, related to this lease? Note: Round answers to the nearest dollar. Balance Sheet Dec. 31, 2020 Assets 10,254 Current Assets Lease Receivable Noncurrent Assets Lease Receivable $ 75,472 x c. What amounts would be presented in the income statement for the year ended December 31, 2020, related to this lease? Note: Round answers to the nearest dollar. Income Statement 2020 Revenue Sales Revenue $ 80,000 Interest revenue $ 4,185 Expenses Cost of Goods Sold 75,815 X Reporting a Sales-Type Lease-Lessor On January 1, 2020, the first day of its accounting year, Lessor Inc., leased certain equipment at an annual payment of $10,254.19, receivable at the beginning of each year for 10 years. The first payment was received immediately. The equipment has an estimated useful life of 12 years and no residual value. Lessor's implicit rate is 6%. Lessor had no other costs associated with this lease and properly classified the lease as a sales- type lease. The leased equipment was carried on Lessor Inc.'s books at $65,000. Required a. Calculate the value of the lease receivable at the commencement of the lease. Note: Round answer to the nearest dollar. Note: Do not use a negative sign with your answer. Lease receivable $ 80,000 b. What amounts would be presented in the balance sheet as of December 31, 2020, related to this lease? Note: Round answers to the nearest dollar. Balance Sheet Dec. 31, 2020 Assets 10,254 Current Assets Lease Receivable Noncurrent Assets Lease Receivable $ 75,472 x c. What amounts would be presented in the income statement for the year ended December 31, 2020, related to this lease? Note: Round answers to the nearest dollar. Income Statement 2020 Revenue Sales Revenue $ 80,000 Interest revenue $ 4,185 Expenses Cost of Goods Sold 75,815 X
