The following are the characteristics of a lease:
1. Fair value of leased asset: 150,000
2. Lease payments: 25,500
3. Lease term : 7
4. Payment frequency : Annual
5. Payment timing: End of year
6. Guaranteed residual value: None
7. Interest rate implicit in lease: 8%

Determine the lease classification and record the journal entry for year 1.

If account is not required please enter 0.

net investment in lease:
Cash:
Asset:
Lease revenue:

Answer rating: 100% (QA)

Based on the information provided this is a capital lease Capital leases are leases where the lessor ... View the full answer