On Dec. 31, 20X1, Dillard Corp. lea 20X1. The first lease payment was 1, 20X1, Dillard Corp. leased equipment to Akin Corp for three years ending Dec. 31, ne first lease payment was made at the inception of the lease. The equipment cost Dillard 0,000 and has an expected useful life of six years. Its normal sales price is $365,760. The lease includes a purchase option exercisable at the end of the lease term that Akin is reasonably certain to exercise at an option price of $10,000. Dillard's interest rate is 10%. Required, showing all of your work: 

A. Determine the amount of the lease payments. 

B. Prepare journal entries to record the inception of the lease on the books of both the lessor and the lessee. 

C. Record Akin's amortization of the asset at the end of the first year.

Answer rating: 100% (QA)

Ans A Assume least rent is X Lease payment will be equal to cost of equipment Cost of asset lease re... View the full answer