Current Attempt in Progress

Your answer is partially correct.

Metlock Corporation enters into a $6-$year lease of equipment on December $31,2024,$ which requires $6$ annual payments of$.$ $$37,100$ each, beginning December $31,2024.$ In addition, Metlock guarantees the lessor a residual value of $$20,900$ at the end of the lease. However, Metlock believes it is probable that the expected residual value at the end of the lease term will be $$10,900.$ The equipment has a useful life of $6$ years. Assume that for Lost Ark Company, the lessor, collectibility of lease payments is probable and the carrying amount of the equipment is $$130,000.$

Prepare Lost Ark's $2024$ and $2025$ journal entries, assuming the implicit rate of the lease is $10\%$ and this is known to Metlock. $($Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $O$ for the amounts. List all debit entries before credit entries. For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round final answers to $0$ decimal places e$.$g$.5,275.)$

Click here to view factor tables.

Date

Account Titles and Explanation

Debit

Credit

Lease Receivable

Cost of Goods Sold

Sales Revenue