Business, 07.05.2021 04:10 adriana145

Ayayai Corporation leases equipment from Falls Company on January 1, 2020. The lease agreement does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. It covers 3 years of the equipmentâs 8-year useful life, and the present value of the lease payments is less than 90% of the fair value of the asset leased. The annual lease payment is $49,000 at the beginning of each year, and Ayayaiâs incremental borrowing rate is 7%, which is the same as the lessorâs implicit rate. Required:
Prepare all the necessary journal entries for Falls Company (the lessor) for 2020, assuming the equipment is carried at a cost of $232,000.

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Ayayai Corporation leases equipment from Falls Company on January 1, 2020. The lease agreement does...

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