Terms of a lease agreement and related facts were as follows:

a$.$ The lease asset had a retail cash selling price of $$100,000.$ Its useful life was six years with no residual value

$($straight$-$line depreciation$).$

b$.$ Annual lease payments at the beginning of each year were $$20,873,$ beginning January $1.$

c$.$ Lessor's implicit rate when calculating annual rental payments was $10\%.$

d$.$ Costs of $$2,062$ for legal fees for the lease execution were the responsibility of the lessor.

Required:

Prepare the appropriate entries for the lessor to record the lease, the initial payment at its beginning, and at the

December $31$ fiscal year$-$end under each of the following three independent assumptions:

The lease term is three years and the lessor paid $$100,000$ to acquire the asset $($operating lease$).$

The lease term is six years and the lessor paid $$100,000$ to acquire the asset. Also assume that adjusting the lease

receivable $($net investment$)$ by initial direct costs reduces the effective rate of interest to $9\%.$

The lease term is six years and the lessor paid $$85,000$ to acquire the asset.

Complete this question by entering your answers in the tabs below.

The lease term is three years and the lessor paid $$100,000$ to acquire the asset $($operating lease$)$

prepare the appropriate entries for the lessor to record the lease, the initial payment at its

beginning, and at the December $31$ fiscal year$-$end.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first

account field. Round your intermediate and final answers to nearest whole dollar.

Journal entry worksheet

Record the lease revenue received by lessor.

Note: Enter debits before credits.