Make the journal entries on the books of vaughn leasing

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Bramble Company has the option to purchase the equipment for $16,900 upon termination of the lease.2.The equipment has a cost and fair value of $168,000 to Vaughn Leasing Company. The useful economic life is 2 years, with a salvage value of $16,900.3.Bramble Company is required to pay $5,400 each year to the lessor for executory costs.4.Vaughn Leasing Company desires to earn a return of 10% on its investment.5.Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor.

Problem (a) Make the journal entries on the books of Vaughn Leasing to reflect the payments received under the lease and to recognize income for the years 2017 and 2018.

Reference no: EM132745906

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