On january 1, leveler corporation leased equipment to messy company. the present value of the lease payments is $200,000 and leveler’s cost of the equipment was $125,000. the lease is properly classified as a sales-type lease. in comparison to the entries that would have been made if this lease did not include a selling profit, how are the entries affected because this lease includes a selling profit?
a the entries made by leveler are not affected.
b the entries made by messy are not affected.
c the entry made by leveler to record the receipt of the first lease payment also will include the sales revenue and cost of goods sold.
d the entry made by messer to record the payment of the first lease payment also will include the sales revenue and cost of goods sold.
e each of the entries made by leveler over the term of the lease will include a portion of the sales revenue and cost of goods sold.
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On january 1, leveler corporation leased equipment to messy company. the present value of the lease...
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