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:

Dramatic Play

Play in which children enact social roles.

Onlooker Play

A stage of play where children watch others play but do not engage in it themselves, allowing them to learn and prepare for future participation.

Formal Games

Formal games are structured forms of play, often with defined rules and objectives, differing from spontaneous or informal games.

Motor Skills

Abilities required to perform precise movements smoothly, generally categorized into fine motor skills and gross motor skills.