Mario Automobile Company leases automobiles under the following terms. A 3-year lease agreement is signed in which
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1. Give the entries on the lessee's books required in the first year of the lease, including the second payment on April 30, 2014. Assume the lease begins May 1, 2013, the beginning of the lessee's fiscal year.
2. What balances relative to the lease would appear on the lessee's balance sheet at the end of Year 3?
3. Assume that at the end of the three years, the automobile is sold by the lessee (with the permission of the lessor) for $3,800. Prepare the entries to record the sale and settlement with the lessor.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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