Business, 25.10.2019 19:43 lacourboud20005

On december 31, 2018, rhone-metro industries leased equipment to western soya co. for a four-year period ending december 31, 2022, at which time possession of the leased asset will revert back to rhone-metro. the equipment cost rhone-metro $402,611 and has an expected useful life of six years. its normal sales price is $402,611. the lessee-guaranteed residual value at december 31, 2022 is $20,000. equal payments under the lease are $110,000 and are due on december 31 of each year. the first payment was made on december 31, 2018-western soya's incremental borrowing rate is 11%. western soya knows the interest rate implicit in the lease payments is 9%. both companies use straight-line depreciation. use (fv of $1, pv of $1, fva of $1, pva of $1, fvad of $1 and pvad of $1) (use appropriate factor(s) from the tables (a) prepare all appropriate entries for both western soya and rhone-metro on december 31, 2019 (the second lease payment and ) prepare the appropriate entries for both western soya and rhone-metro on december 31, 2022 assuming the equipment is returned to rhone-metro and the actual residual value on that date is $1,000.

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On december 31, 2018, rhone-metro industries leased equipment to western soya co. for a four-year pe...