ML Leased a Computer to LH on January 1, 2014

question 69

Essay

ML leased a computer to LH on January 1, 2014.The lease was a five year fixed, non-cancellable agreement.The payments were finalized at $2,380 per year with the first payment on January 1, 2014 and ML paid $9,500 for the computer.Carrying value is equal to fair value and there was a guaranteed residual value by lessee of $2,000.The lease is deemed a finance lease.Based on the above information, what type of lease is this for the lessor? Prepare the journal entries for at the inception of the lease using the gross method.

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Definitions:

Menarche

The first occurrence of menstruation in a female, marking the onset of reproductive capability.

Body Fat

The portion of the human body that consists of stored lipids, serving as energy reserves and insulation.

Substance Abuse

The adverse or unsafe utilization of psychoactive substances, including alcohol and illicit drugs, which causes addiction or dependence.

Psychological Problems

Refers to a range of mental health issues that can affect mood, thinking, and behavior.