Answer:
1) sales revenue 61,995.26
2) lease receivables 61,995.26 debit
sales revenue 61,995.26 credit
cost of good sold 56,000 debit
truck inventory 56,000 credit
truck 61,995.26 debit
lease payable 61,995.26 credit
3)
For the lessor will be interest revenue while interest expense for the lessee
4)
cash 7,000 debit
interest revenue 1,649.86 credit
lease receivables 5,510.65 credit
--entry for the lessor--
lease payable 5,510.65 debit
interest expense 1,649.86 debit
cash 7,000 credit
--entry for the lessee--
5)
cash 21,000 debit
interest revenue 611.65 credit
lease receivables 20,388.35 credit
--entry for the lessor--
lease payable 20,388.35 debit
interest expense 611.65 debit
cash 21,000 credit
--entry for the lessee--
Explanation:
1) the sales revenue will be the present value of all the lease payments and the residual value of the asset or the bargain-option
Present Value of Annuity-due
C 7,000
time 8
rate 0.03
PV $50,611.9807
PRESENT VALUE OF LUMP SUM
Maturity 14,000.00
time 7.00
rate 0.03
PV 11,383.28
PV of the lease: 50,611.98 + 11,051.73 = 61,995.26
2) the lessor will have a lease receivable while the lessee has a lease payable.