Business, 21.04.2020 18:42 dale87

Blossom Corporation enters into a 6-year lease of equipment on December 31, 2016, which requires 6 annual payments of $39,800 each, beginning December 31, 2016 In addition, Blossom guarantees the lessor a residual value of $21,100 at the end of the lease. However, Blossom believes it is probable that the expected residual value at the end of the lease term will be $11,100. The equipment has a useful life of 6 years. Assume that for Lost Ark Company, the lessor, collectibility of lease payments is probable and the carrying amount of the equipment is $160,000 Prepare Lost Ark's 2016 and 2017 journal entries, assuming the implicit rate of the lease is 10% and this is known to Blossom.

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Blossom Corporation enters into a 6-year lease of equipment on December 31, 2016, which requires 6 a...

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