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Exercise 21-7On January 1, 2014, Bensen Company leased equipment to Flynn Corporation. The following information pertains to this lease.1.The term of the noncancelable lease is 6 years, with no renewal option. The equipment reverts to the lessor at the termination of the lease.2.Equal rental payments are due on January 1 of each year, beginning in 2014.3.The fair value of the equipment on January 1, 2014, is $208,600, and its cost is $160,622.4.The equipment has an economic life of 8 years, with an unguaranteed residual value of $10,810. Flynn depreciates all of its equipment on a straight-line basis.5.Bensen set the annual rental to ensure an 10% rate of return. Flynn’s incremental borrowing rate is 11%, and the implicit rate of the lessor is unknown.6.Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by the lessor.(Both the lessor and the lessee’s accounting period ends on December 31.) see attached Table 6-5 and 6-2 pic1. Calculate the amount of the annual rental payment.2. Prepare
all the necessary journal entries for Flynn for 20143. Prepare
all the necessary journal entries for Bensen for 2014Exercise 21-9 (Part Level Submission)The following facts pertain to a noncancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee.Inception date:May 1, 2014Annual lease payment due at the beginning of each year, beginning with May 1, 2014$17,694.55Bargain-purchase option price at end of lease term$3,730.00Lease term5 yearsEconomic life of leased equipment10 yearsLessor’s cost$61,100.00Fair value of asset at May 1, 2014$76,100.00Lessor’s implicit rate10%Lessee’s incremental borrowing rate10%The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costsSee attached Table 6-5 and 6-2 pic1. Compute
the amount of the lease receivable at the inception of the lease2. Prepare
a lease amortization schedule for Mooney Leasing Company for the 5-year lease
term3. Prepare
the journal entries to reflect the signing of the lease agreement and to record
the receipts and income related to this lease for the years 2014, 2015, and
2016. The lessor’s accounting period ends on December 31. Reversing entries are
not used by MooneyMust show work in excel format
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