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Prepare necessary journal entries for the entire lease term

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Reference no: EM133130310

Question - On January 1, 2019, the entity leased an equipment to another entity with the following information:

Cost of machinery 3,760,100

Residual value guarantee 400,000

Useful life and lease term 4 years

Implicit interest rate 10%

Lease payments are received at the beginning of the year starting January 1, 2019.

Required -

a. Compute the gross investment, net investment, and unearned interest income.

b. Prepare the table of amortization.

c. Prepare necessary journal entries for the entire lease term and the return of the asset to the lesson.

Reference no: EM133130310

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