Scape Corp. manufactures telephony equipment. Scape leased equipment to User, Inc., on January 1, 2013. Scape produced the equipment at a cost of $5,000,000. Collectibility of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred.
Required:
Prepare appropriate entries for both User and Scape 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

Scape Corp. manufactures telephony equipment. Scape leased equipment to User, Inc., on January 1, 2013. Scape produced the equipment at a cost of $5,000,000.  Collectibility of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred.
Required:
Prepare appropriate entries for both User and Scape 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 Scape Corp. manufactures telephony equipment. Scape leased equipment to User, Inc., on January 1, 2013. Scape produced the equipment at a cost of $5,000,000.  Collectibility of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred.
Required:
Prepare appropriate entries for both User and Scape 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).