Taylor Company leased an asset from Lease Corp. using an operating lease for equipment with a useful life of seven years

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Taylor Company leased an asset from Lease Corp. using anoperating lease for equipment with a useful life of seven years.The initial lease term was for three years. After two years, TaylorCompany and Lease Corp. agree to extend the lease term by fouryears, and to change the amount of lease payments. The additionalfour years were not originally an option. The increase in presentvalue of lease payments for Taylor is $200,000. The present valueof the remaining lease payments for Lease Corp is $300,000. Theinitial cost of the equipment to Lease Corp was $500,000. Theuseful life of the equipment is estimated to be seven years anddepreciation is computed straight-line with no residual value. Howshould Lease Corp account for this lease modification? (Select allthat apply)
Multiple select question.
credit lease payable for $200,000
credit asset $500,000
credit sales revenue for $300,000
debit accumulated depreciation for $142,857
debit cost of goods sold for $357,143
debit right-of-use asset for $200,000
debit cost of goods sold for $500,000
ANSWER!!!
credit asset $500,000
credit sales revenue for $300,000
debit accumulated depreciation for $142,857
debit cost of goods sold for $357,143
debit lease receivable for $300,000
debit lease receivable for $300,000.