Elf Leasing purchased a machine for $500,000 and leased it to IGA, Inc., on January 1, 2013. Collectibility of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred.
Required:
Prepare appropriate entries for both IGA and Elf Leasing from the inception of the lease through the second rental payment on April 1, 2013. Depreciation is recorded at the end of each fiscal year (December 31).

Question

Elf Leasing purchased a machine for $500,000 and leased it to IGA, Inc., on January 1, 2013.  Collectibility of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred.
Required:
Prepare appropriate entries for both IGA and Elf Leasing from the inception of the lease through the second rental payment on April 1, 2013. Depreciation is recorded at the end of each fiscal year (December 31).

Quizplus · Accepted Answer

The Answer of Elf Leasing purchased a machine for $500,000 and leased it to IGA, Inc., on January 1, 2013.  Collectibility of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred.
Required:
Prepare appropriate entries for both IGA and Elf Leasing from the inception of the lease through the second rental payment on April 1, 2013. Depreciation is recorded at the end of each fiscal year (December 31).

Elf Leasing Purchased a Machine for $500,000 and Leased It