Business, 05.05.2020 17:17 joshuasanders7490

Blossom Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-year period and requires equal annual payments of $32,207 at the beginning of each year. The first payment is received on January 1, 2020. Blossom had purchased the machine during 2016 for $146,000. Collectibility of lease payments by Blossom is probable. Blossom set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Blossom at the termination of the lease.

Compute the amount of the lease receivable.

Prepare all necessary journal entries for Blossom for 2020.

Suppose the collectibility of the lease payments was not probable for Blossom. Prepare the necessary journal entry for the company in 2020.

Suppose at the end of the lease term, Blossom receives the asset and determines that it actually has a fair value of $1,470 instead of the anticipated residual value of $0. Record the entry to recognize the receipt of the asset for Blossom at the end of the lease term.

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Blossom Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The...

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