Business, 06.06.2020 22:58 21vdawson

Assume that IBM leased equipment that was carried at a cost of $172,000 to Sharon Swander Company. The term of the lease is 6 years beginning January 1, 2017, with equal rental payments of $35,176 at the beginning of each year. All executory costs are paid by Swander directly to third parties. The fair value of the equipment at the inception of the lease is $172,000. The equipment has a useful life of 6 years with no salvage value. The lease has an implicit interest rate of 9%, no bargain-purchase option, and no transfer of title. Collectibility is reasonably assured with no additional cost to be incurred by IBM. Required:
Prepare Swander's December 31, 2019, journal entries at commencement of the lease.

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Assume that IBM leased equipment that was carried at a cost of $172,000 to Sharon Swander Company. T...

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