On January 1, 2014, a lessor and lessee signed a lease calling for 5 annual payments of $10,000 to be made starting on December 31, 2014.The market value and book value of the asset at inception is $41,013.The lessee also guarantees the full $5,000 residual value at December 31, 2018, the end of the lease term.Both parties use 10%.The lessee uses straight-line depreciation.Provide the first year (2014)entries for both lessor and lessee.Assume there are no uncertainties concerning collection of lease payments by lessor, nor unreimbursable costs of lessor.

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The Answer of On January 1, 2014, a lessor and lessee signed a lease calling for 5 annual payments of $10,000 to be made starting on December 31, 2014.The market value and book value of the asset at inception is $41,013.The lessee also guarantees the full $5,000 residual value at December 31, 2018, the end of the lease term.Both parties use 10%.The lessee uses straight-line depreciation.Provide the first year (2014)entries for both lessor and lessee.Assume there are no uncertainties concerning collection of lease payments by lessor, nor unreimbursable costs of lessor.

On January 1, 2014, a Lessor and Lessee Signed a Lease