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Prepare a lease amortization schedule

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Question - On December 31, 2017, Pool Corporation leased a machine from Renn Company for an eight-year period expiring December 30, 2025. Equal annual payments of $200,000 are due on December 31 of each year, beginning with December 31, 2017. The lease is properly classified as a finance lease on Pool's books and a sales type lease on Renn's books. Renn manufactured the machine for $950,000 .The present value at December 31, 2017 of the eight lease payments over the lease term discounted at 10% is $1,173,685. Show all computations.

Required -

1. Prepare a lease amortization schedule for 12/31/17, 12/31/18 and 12/31/19.

2. Prepare Pool's (lessee) journal entries for 12/31/17, 12/31/18 and 12/31/19.

3. Prepare Renn's (lessor) journal entries for 12/31/17, 12/31/18 and 12/31/19.

Reference no: EM133090380

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