The following facts pertain to a non-cancelable lease agreement betweenTamariskLeasing Company andCarla VistaCompany, a lessee. Commencement dateMay
Question:
The following facts pertain to a non-cancelable lease agreement betweenTamariskLeasing Company andCarla VistaCompany, a lessee.
Commencement dateMay 1, 2020Annual lease payment due at the beginning ofeach year, beginning with May 1, 2020$19,656.69Bargain purchase option price at end of lease term$7,000Lease term5yearsEconomic life of leased equipment10yearsLessor's cost$65,000Fair value of asset at May 1, 2020$93,000Lessor's implicit rate6%Lessee's incremental borrowing rate6%
The collectibility of the lease payments byTamariskis probable.
Suppose the collectibility of the lease payments was not probable forTamarisk. 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.)