Solve E21-11B only.
E21-10B (L02,4) (Lessee Entries with Bargain Purchase Option) The following facts pertain to a non-cancelable lease agreement between Carmichael Leasing Company and Banket Company, a lessee. Annual lease payment due at the beginning of each year, beginning with June 1, 2017 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at June 1, 2017 June 1, 2017 $47,507.30 $12,000.00 4 years 12 years $161,000.00 $184,000.00 0% 6% r's implicit rate Lessee's incremental borrowing rate The collectibility of the lease payments by Carmichael is probable. Instructions (Round all numbers to the nearest cent.) (a) Discuss the nature of this lease to Banket. (b) Discuss the nature of this lease to Carmichael. (c) Prepare a lease amortization schedule for Banket for the 4-year lease term. (d) Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2017 and 2018. Banket's annual accounting period ends on December 31 Rev ersing entries are used by Banket. 4 Chapter 21A Accounting for Leases E21-11B (LO2,4) (Lessor Entries with Bargain Purchase Option) A lease agreement between Carmichael Leasing Company and Banket Company is described in E21-10B. Instructions Refer to the data in E21-10B and do the following for the lessor. (Round all numbers to the nearest cent.) (a) Compute the amount of the lease receivable at commencement of the lease. (b) Prepare a lease amortization schedule for Carmichael for the 4-year lease term. (c) Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2017 and 2018. The lessor's accounting period ends on December 31. Reversing entries are not used by Carmichael. (d) Suppose the collectibility of the lease payments was not probable for Carmichael. Prepare all necessary journal entries for the company in 2017 E21-10B (L02,4) (Lessee Entries with Bargain Purchase Option) The following facts pertain to a non-cancelable lease agreement between Carmichael Leasing Company and Banket Company, a lessee. Annual lease payment due at the beginning of each year, beginning with June 1, 2017 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at June 1, 2017 June 1, 2017 $47,507.30 $12,000.00 4 years 12 years $161,000.00 $184,000.00 0% 6% r's implicit rate Lessee's incremental borrowing rate The collectibility of the lease payments by Carmichael is probable. Instructions (Round all numbers to the nearest cent.) (a) Discuss the nature of this lease to Banket. (b) Discuss the nature of this lease to Carmichael. (c) Prepare a lease amortization schedule for Banket for the 4-year lease term. (d) Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2017 and 2018. Banket's annual accounting period ends on December 31 Rev ersing entries are used by Banket. 4 Chapter 21A Accounting for Leases E21-11B (LO2,4) (Lessor Entries with Bargain Purchase Option) A lease agreement between Carmichael Leasing Company and Banket Company is described in E21-10B. Instructions Refer to the data in E21-10B and do the following for the lessor. (Round all numbers to the nearest cent.) (a) Compute the amount of the lease receivable at commencement of the lease. (b) Prepare a lease amortization schedule for Carmichael for the 4-year lease term. (c) Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2017 and 2018. The lessor's accounting period ends on December 31. Reversing entries are not used by Carmichael. (d) Suppose the collectibility of the lease payments was not probable for Carmichael. Prepare all necessary journal entries for the company in 2017
