Sage 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 $280,968, and its unguaranteed residual value at the end of the lease term is estimated to be $19,300. National will pay annual payments of $39,000 at the beginning of each year. Sage incurred costs of $197,000 in manufacturing the equipment and $4,300 in sales commissions in closing the lease. Sage has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 9%. Click here to view factor tables. Discuss the nature of this lease in relation to the lessor. This is a 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 O decimal places, e.g. 5,275.) (1) Lease receivable $ (2) Sales price 0 (3) Cost of sales 0 Prepare a 10-year lease amortization schedule for Sage, the lessor. (Round answers to 0 decimal places e.g. 5,275.) SAGE COMPANY (Lessor) Lease Amortization Schedule Annuity Due Basis, Unguaranteed Residual Value Interest on Lease Receivable Lease Receivable Recovery Beginning of Year Annual Lease Payment Plus Residual Value Lease Receivable Initial PV $ End of 10 Prepare all of the lessor's journal entries for the first year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry"for the account titles and enter Ofor the amounts. Round answers to decimal places e.g. 5,275.) Account Titles and Explanation Debit Credit (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.) Sage 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 $280,968, and its unguaranteed residual value at the end of the lease term is estimated to be $19,300. National will pay annual payments of $39,000 at the beginning of each year. Sage incurred costs of $197,000 in manufacturing the equipment and $4,300 in sales commissions in closing the lease. Sage has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 9%. Click here to view factor tables. Discuss the nature of this lease in relation to the lessor. This is a 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 O decimal places, e.g. 5,275.) (1) Lease receivable $ (2) Sales price 0 (3) Cost of sales 0 Prepare a 10-year lease amortization schedule for Sage, the lessor. (Round answers to 0 decimal places e.g. 5,275.) SAGE COMPANY (Lessor) Lease Amortization Schedule Annuity Due Basis, Unguaranteed Residual Value Interest on Lease Receivable Lease Receivable Recovery Beginning of Year Annual Lease Payment Plus Residual Value Lease Receivable Initial PV $ End of 10 Prepare all of the lessor's journal entries for the first year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry"for the account titles and enter Ofor the amounts. Round answers to decimal places e.g. 5,275.) Account Titles and Explanation Debit Credit (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.)
