On January 1, 2019, Comet International (Lessor) leased equipment to Ajax Limited (Lessee) which Comet purchased for this purpose. The equipment has an estimated useful life of 8 years with no salvage value. The lease term is 5 years with five annual payments $21,978 due at the beginning of 2019 and at each December 31 from 2019 to 2022. The implicit interest rate of the lease is 6%, which is also Ajax's cost of capital. At the end of the lease period on December 31, 2023, Ajax can exercise a bargain purchase option for $25,000.

Required:

. How much is total lease revenue?

How much is total expense including lease expense and amortization expense?

Sales lease with selling profit: Write the journal entry for the lessor assuming the cost of the equipment is $100,000 (so there is a selling profit).

Answer rating: 100% (QA)

1 Total Lease Revenue The total lease revenue is the sum of all the lease payments over the lease te... View the full answer