E$20\mathrm{.}10($LO $2,4)($Lessee Entries with Bargain Purchase Option$)$ The following facts pertain to a non$-$cancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee.

Commencement dateMay $1,2025$Annual lease payment due at the beginning of each year, beginning with May $1,2025$$$20,471\mathrm{.}94$Bargain purchase option price at end of lease term$ $4,000\mathrm{.}00$Lease term$5$ yearsEconomic life of leased equipment$10$ yearsLessor$$s cost$$65,000\mathrm{.}00$Fair value of asset at May $1,2025$$$91,000\mathrm{.}00$Lessor$$s implicit rate$8\%$Lessee$$s incremental borrowing rate$8\%$The collectibility of the lease payments by Mooney is probable.

Instructions

$($Round all numbers to the nearest cent.$)$

Discuss the nature of this lease to Rode.

Discuss the nature of this lease to Mooney.

Prepare a lease amortization schedule for Rode for the $5-$year lease term.

Prepare the journal entries on the lessee$$s books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years $2025$ and $2026.$ Rode$$s annual accounting period ends on December $31.$ Reversing entries are used by Rode.

E$20\mathrm{.}11($LO $2,4)($Lessor Entries with Bargain Purchase Option$)$ A lease agreement between Mooney Leasing Company and Rode Company is described in E$20\mathrm{.}10.$

Instructions

Refer to the data in E$20\mathrm{.}10$ and do the following for the lessor. $($Round all numbers to the nearest cent.$)$

Compute the amount of the lease receivable at commencement of the lease.

Prepare a lease amortization schedule for Mooney for the $5-$year lease term.

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 $2025$ and $2026.$ The lessor$$s accounting period ends on December $31.$ Reversing entries are not used by Mooney.

Suppose the collectibility of the lease payments was not probable for Mooney. Prepare all necessary journal entries for the company in $2025.$