Marin Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to...

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Marin Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Cullumber Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. 2. Cullumber has the option to purchase the equipment for $27,000 upon termination of the lease. It is not reasonably certain that Cullumber will exercise this option. The equipment has a cost of $340,000 and fair value of $396,500 to Marin Leasing. The useful economic life is 2 years, with a residual value of $27,000. 3. Marin Leasing desires to earn a return of 5% on its investment. 4. Collectibility of the payments by Marin Leasing is probable. Prepare the journal entries on the books of Marin Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places eg. 5,275.) Account Titles and Explanation Debit Credit Lease Receivable Cost of Goods Sold Sales Revenue Inventory Cash Interest Revenue Lease Receivable. Cash Interest Revenue Lease Receivable 396500 315510 200069 200069 372010 340000 19825 180244 19825 180244 Marin Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Cullumber Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. 2. Cullumber has the option to purchase the equipment for $27,000 upon termination of the lease. It is not reasonably certain that Cullumber will exercise this option. The equipment has a cost of $340,000 and fair value of $396,500 to Marin Leasing. The useful economic life is 2 years, with a residual value of $27,000. 3. Marin Leasing desires to earn a return of 5% on its investment. 4. Collectibility of the payments by Marin Leasing is probable. Prepare the journal entries on the books of Marin Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places eg. 5,275.) Account Titles and Explanation Debit Credit Lease Receivable Cost of Goods Sold Sales Revenue Inventory Cash Interest Revenue Lease Receivable. Cash Interest Revenue Lease Receivable 396500 315510 200069 200069 372010 340000 19825 180244 19825 180244