Question - Neely BBQ leased equipment from Smoke Industries on January 1, 2016. Smoke Industries had manufactured the equipment at a cost of $810,000. Both companies employ the lease ASU Other info.
Lease term, 4 years.
Annual payments are $360,000 beginning jan 1 2016 and at december 31, 2016, 2017 and 2018.
Life of asset : 4 years rate the lessor charges: 8%
1. Prepare the appropriate entries for Neely BBQ (Lessee) on January 1, 2016, and December 31, 2016.
2. Prepare the appropriate entries for Smoke Industries (Lessor) on January 1, 2016, and December 31, 2016. Assume that the risks and rewards of ownership are assumed transferred to the lessee.
3. Prepare the appropriate entries for Smoke Industries (Lessor) on January 1, 2016, and December 31, 2016. Assume that the risks and rewards of ownership are assumed NOT to have been transferred to the lessee.