Swifty Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $445,217, and its guaranteed residual value at the end of the noncancelable lease term is estimated to be $13,500. The hospital will pay rents of $65,100 at the beginning of each year and all maintenance, insurance, and taxes. Swifty Inc. incurred costs of $274,000 in manufacturing the machine and $13,600 in negotiating and closing the lease. Swifty Inc. has determined that the collectibility of the lease payments is reasonably predictable, that there will be no additional costs incurred, and that the implicit interest rate is 10%. Click here to view factor tables

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 answer to 0 decimal places e.g. 58,971.)

(1)		Lease receivable at inception of the lease		$
(2)		Sales price		$
(3)		Cost of sales		$

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List of Accounts

Prepare a 10-year lease amortization schedule. (Round answers to 0 decimal places e.g. 58,971.)

SWIFTY INC. (Lessor) Lease Amortization Schedule (Annuity due basis, guaranteed residual value)
Beginning of Year		Annual Lease Payment Plus Residual Value		Interest on Lease Receivable		Recovery of Lease Receivable		Lease Receivable
Initial PV		$		$		$		$
1
2
3
4
5
6
7
8
9
10
End of 10
		$		$		$

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List of Accounts

Prepare all of the lessors 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 0 for the amounts. Round answers to 0 decimal places e.g. 58,971.)

No.	Account Titles and Explanation	Debit	Credit
1.
	(To record the lease.)
	(To record the incurrence of initial direct costs relating to the lease.)
2.
	(To record receipt of the first lease payment.)
3.
	(To record interest earned during the first year of the lease.)