The following facts pertain to a non-cancelable lease agreement between Tamarisk Leasing Company and Carla Vista Company, a lessee.

Commencement date		May 1, 2017
Annual lease payment due at the beginning of
each year, beginning with May 1, 2017		$ 18,922.70
Bargain purchase option price at end of lease term		$ 5,000
Lease term		5	years
Economic life of leased equipment		10	years
Lessor’s cost		$ 65,000
Fair value of asset at May 1, 2017		$ 85,000
Lessor’s implicit rate		8	%
Lessee’s incremental borrowing rate		8	%

The collectibility of the lease payments by Tamarisk is probable.

Compute the amount of the lease receivable at commencement of the lease. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answer to 2 decimal places, e.g. 5,275.15.)

Lease receivable at commencement

$

Prepare a lease amortization schedule for Tamarisk for the 5-year lease term. (Round answers to 2 decimal places, e.g. 5,275.15.)

5/1/17

5/1/17

5/1/18

5/1/19

5/1/20

5/1/21

4/30/22

Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2017 and 2018. The lessor’s accounting period ends on December 31. Reversing entries are not used by Tamarisk. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15.)

DATE	ACCT TITLE	DR	CR
5/1/17
	TO RECORD THE LEASE
	TO RECORD LEASE PAYMENT

Suppose the collectibility of the lease payments was not probable for Tamarisk. Prepare all necessary journal entries for the company in 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15.)

DATE	ACCT TITLE	DR	CR
5/1/17