Use the information for Merrill Corporation from BE20.11. Assume that for Moxey Corporation, the lessor, collectibility is reasonably predictable, there are no important uncertainties concerning costs, and the equipment’s carrying amount is $121,000. Prepare Moxey’s September 1, 2020 journal entries. 

Data From BE20.11. 

Merrill Corporation, which uses ASPE, enters into a six-year lease of equipment on September 1, 2020, that requires six annual payments of $28,000 each, beginning September 1, 2020. In addition, Merrill guarantees the lessor a residual value of $17,000 at lease end. The equipment has a useful life of seven years.