The following facts pertain to a non-cancelable lease agreement between Skysong Leasing Company and Sheridan Company,...

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The following facts pertain to a non-cancelable lease agreement between Skysong Leasing Company and Sheridan Company, a lessee. Commencement date May 1, 2020 Annual lease payment due at the beginning of each year, beginning with May 1, 2020 $15,349.90 Bargain purchase option price at end of lease term $6,000 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $65,000 Fair value of asset at May 1, 2020 $76,000 Lessor's implicit rate 4 % Lessee's incremental borrowing rate 4 % The collectibility of the lease payments by Skysong is probable. Click here to view factor tables. 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 2020 and 2021. The lessor's accounting period ends on December 31. Reversing entries are not used by Skysong. (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. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 5/1/20 Lease Receivable Cost of Goods Sold Sales Revenue Inventory (To record the lease) 5/1/20 Cash Lease Receivable (To record lease payment) 12/31/20 v Interest Receivable Interest Revenue 5/1/21 Cash Lease Receivable Interest Revenue 12/31/21 Interest Receivable Interest Revenue > The following facts pertain to a non-cancelable lease agreement between Skysong Leasing Company and Sheridan Company, a lessee. Commencement date May 1, 2020 Annual lease payment due at the beginning of each year, beginning with May 1, 2020 $15,349.90 Bargain purchase option price at end of lease term $6,000 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $65,000 Fair value of asset at May 1, 2020 $76,000 Lessor's implicit rate 4 % Lessee's incremental borrowing rate 4 % The collectibility of the lease payments by Skysong is probable. Click here to view factor tables. 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 2020 and 2021. The lessor's accounting period ends on December 31. Reversing entries are not used by Skysong. (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. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 5/1/20 Lease Receivable Cost of Goods Sold Sales Revenue Inventory (To record the lease) 5/1/20 Cash Lease Receivable (To record lease payment) 12/31/20 v Interest Receivable Interest Revenue 5/1/21 Cash Lease Receivable Interest Revenue 12/31/21 Interest Receivable Interest Revenue >

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Date Account Titles and Explanation Debit Credit 5120 ... View the full answer