Calculate amount of selling profit that york would recognize

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Reference no: EM132468531

The Freeman Company leased equipment from York Industries on January 1, 2019. York purchased the equipment at a cost of $ 180,000.

Other information:

Lease term:                  3 years

Annual payments:          $ 80,000

Life of asset:                  3 years

Implicit interest rate:          9%

Leesee's Incremental Rate:   9%

Required:

Round your answers to the nearest whole dollar amounts.

Question 1. Calculate the amount of selling profit that York would recognize in this sales-type lease. Round to the nearest dollar.

Question 2. Prepare the appropriate journal entries for York on January 1, 2019. Round to the nearest dollar.

Question 3. Prepare the appropriate journal entry for York on December 31, 2019. Round to the nearest dollar.

Reference no: EM132468531

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