Answer:
lease receive = $76441 ( debit entry )
cost of goods sold value = $42178 (debit entry )
equipment cost is = $45,000 ( credit entry )
sales revenue is = $73,619 (credit entry )
Explanation:
Given data
leased equipment costing = $45,000
lease agreement @ six annual payments = $15,000
present value of the annual lease payments = $73,619
residual value = $5,000
present value residual value = $2,822
to find out
journal entry recorded by Manlier at the beginning of the lease
solution
first we calculate lease receive that is debit entry
lease receive = present value of the annual lease payments + present value residual value
lease receive = 73619 + 2822
lease receive = $76441 ( debit entry )
now we calculate cost of goods sold value i.e
cost of goods sold value = leased equipment costing - present value residual value
cost of goods sold value = 4500 - 2822
cost of goods sold value = $42178 (debit entry )
equipment cost is = leased equipment costing = $45,000 ( credit entry )
sales revenue is = present value of the annual lease payments = $73,619 (credit entry )
