The Following Are Characteristics of a Lease Required:
Determine the Appropriate Classification for This Lease for the l

question 91

Essay

The following are characteristics of a lease:
$$\begin{array} { | l | l | } \hline \text { Price of leased asset from manufacturer } & 312,100 \\\hline \text { Lease payments } & 75,000 \\\hline \text { Lease term } & 4 \text { years } \\\hline \text { Lease frequency } & \text { Annual } \\\hline \text { Payment timing } & \text { End of year } \\\hline \text { Guaranteed residual value } & 15,000 \\\hline \text { Interest rate implicit in the lease agreement } & 5 \% \\\hline\end{array}$$
Required:
Determine the appropriate classification for this lease for the lessor (who is not the manufacturer)and record the journal entries for the lessor for the first year of the lease.

---

Definitions:

Consumer Price

The price that end-users or consumers pay for goods or services, including taxes and distribution expenses.

More Elastic

Refers to a situation where the quantity demanded or supplied of a good or service is more sensitive to changes in price.

Municipal Swimming Pool

A public swimming facility maintained by a local government for the use of its residents.

Entrance Fees

Entrance fees are charges that individuals must pay to gain access to a facility, event, or organization.