Business, 22.02.2021 18:50 niescarlosj

Sage Hill Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Oriole Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Oriole has the option to purchase the equipment for $17,000 upon termination of the lease. It is not reasonably certain that Oriole will exercise this option.
2. The equipment has a cost of $140,000 and fair value of $195,500 to Sage Hill Leasing. The useful economic life is 2 years, with a residual value of $17,000.
3. Sage Hill Leasing desires to earn a return of 5% on its investment.
4. Collectibility of the payments by Sage Hill Leasing is probable

Required:
Prepare the journal entries on the books of Sage Hill Leasing to reflect the payments received under the lease and to recognize income for the years 2017 and 2018.

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Sage Hill Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment...

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