On December 10, 2014, LMN purchased a special machine for leasing purposes; it cost $10,000.On January 1, 2015, the machine was leased to ABC INC.under the following terms (it is a direct financing lease): a.lease term 4 years; interest rate 10 percent; rentals payable at year-end.b.LMN retains the residual value of $1,000 .There is no guarantee on the residual value.
On January 1, 2015, when the lease term starts, the following accounting amounts should be used:

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The Answer of On December 10, 2014, LMN purchased a special machine for leasing purposes; it cost $10,000.On January 1, 2015, the machine was leased to ABC INC.under the following terms (it is a direct financing lease): a.lease term 4 years; interest rate 10 percent; rentals payable at year-end.b.LMN retains the residual value of $1,000 .There is no guarantee on the residual value.
On January 1, 2015, when the lease term starts, the following accounting amounts should be used:

On December 10, 2014, LMN Purchased a Special Machine for Leasing