The following facts pertain to a non-cancelable lease agreement between Kingbird Leasing Company and Blossom Company, a lessee. Commencement date May 1, 2020 Annual lease payment due at the beginning of each year, beginning with May 1, 2020 $19,656.69 Bargain purchase option price at end of lease term $7,000 Lease term 5 years Economic life of leased equipment 10 years Lessors cost $65,000 Fair value of asset at May 1, 2020 $93,000 Lessors implicit rate 6 % Lessees incremental borrowing rate 6 % The collectibility of the lease payments by Kingbird is probable.

Exercise 21-11 The following facts pertain to a non-cancelable lease agreement between Kingbird Leasing Company and Blossom Company, a lessee. May 1, 2020 Commencement date Annual lease payment due at the beginning of each year, beginning with May 1, 2020 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2020 Lessor's implicit rate Lessee's incremental borrowing rate $19,656.69 $7,000 5 years 10 years $65,000 $93,000 6 % 6 % The collectibility of the lease payments by Kingbird is probable. Click here to view factor tables. Compute the amount of the lease receivable at commencement of the lease. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answer to 2 decimal places, e.g. 5,275.15.) Lease receivable at commencement $ Prepare a lease amortization schedule for Kingbird for the 5-year lease term. (Round answers to 2 decimal places, e.g. 5,275.15.) KINGBIRD LEASING COMPANY (Lessor) Lease Amortization Schedule Interest on Lease Recovery of Lease Receivable Receivable Annual Lease Payment Plus BPO Date Lease Receivable 5/1/20 $ 5/1/20 5/1/21 5/1/22 5/1/23 5/1/24 4/30/25 $ 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 2020 and 2021. The lessor's accounting period ends on December 31. Reversing entries are not used by Kingbird. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To record the lease) (To record lease payment) Suppose the collectibility of the lease payments was not probable for Kingbird. Prepare all necessary journal entries for the company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15.) Date Account Titles and Explanation Debit Credit 5/1/20 Click if you would like to Show Work for this question: Open Show Work