Problemon january 1 2013 greenspan corporation a machinery, Ask an Expert

Accounting

Problem:

On January 1, 2013, Greenspan Corporation, a machinery dealer, leased to Geitner Inc. a machine that cost $127,000 to manufacture. The lease agreement covers the 6-year useful life of the machinery and requires 6 equal annual payments of $39,200 payable each January 1, beginning January 1, 2013. An interest rate of 11% is implicit in the lease agreement. Collectibility of the rentals is reasonably assured, and there are no important uncertainties concerning costs.

Required:

Question: Prepare Greenspan's January 1, 2013, journal entries. Present value factor is 4.69590 for an annuity due and the present value factor for an ordinary annuity is 4.23054.

Note: Please show how to work it out.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91163744

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