- 1 The Term Of The Non Cancelable Lease Is 6 Years With No Renewal Option The Equipment Has An Estimated Economic Life 1 (94.69 KiB) Viewed 56 times
- 1 The Term Of The Non Cancelable Lease Is 6 Years With No Renewal Option The Equipment Has An Estimated Economic Life 2 (85.34 KiB) Viewed 56 times
1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. 2. The cost of the asset to the lessor is $451,000. The fair value of the asset at January 1, 2020, is $451,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $24,225, none of which is guaranteed. 4. The agreement requires equal annual rental payments, beginning on January 1, 2020. 5. Collectibility of the lease payments by Shamrock is probable.
Lease Receivable 451000 Cost of Goods Sold Sales Revenue Inventory 451000 (To record the lease)