Assume Capital Leasing constructed the delivery trucks at a cost of $60,000 and then leased the delivery trucks to Tom's Appliances under the terms listed in Requirements.

3-1 Identify and explain whether Capital Leasing will classify this lease as a Sales Type without selling profit, Sales Type with selling profit, or an Operating Lease.

3-2 Prepare the January 1, 2022 journal entries that Capital Leasing would make to lease the delivery trucks to Tom's Appliance and receive the first lease payment.

3-3 Prepare the June 30, 2022, and December 31, 2022 journal entries that Capital Leasing would record for the lease.

Answer rating: 100% (QA)

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