he Freeman Company leased equipment from York Industries on January 1, 2019. York purchased the equipment at a cost of $ 180,000.
he Freeman Company leased equipment from York Industries on January 1, 2019. York purchased the equipment at a cost of $ 180,000.
Other information:
Lease term: 3 years
Annual payments: $ 80,000
Life of asset: 3 years
Implicit interest rate: 9%
Leesee’s Incremental Rate: 9%
Required:
Round your answers to the nearest whole dollar amounts.
1. Calculate the amount of selling profit that York would recognize in this sales-type lease. Round to the nearest dollar.
2. Prepare the appropriate journal entries for York on January 1, 2019. Round to the nearest dollar.
3. Prepare the appropriate journal entry for York on December 31, 2019. Round to the nearest dollar.
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