Use the information for Merrill Corporation from BE20–6. Assume that for Moxey Corporation, the lessor, collectibility is reasonably predictable

Use the information for Merrill Corporation from BE20–6. Assume that for Moxey Corporation, the lessor, collectibility is reasonably predictable, there are no important uncertainties concerning costs, and the machinery’s carrying amount is $121,000. Prepare Moxey’s September 13, 2011 journal entries.

Lease Payments Receivable............... 185,000

    Sales...............................           147,047

    Unearned Interest Income—Leases.....            37,953

[($28,000 X 4.88965) + ($17,000 X .59627) = $147,047]

($28,000 X 6) + $17,000 = $185,000

Payments are assumed to be at the beginning of each year

Excel formula =PV(rate,nper,pmt,fv,type)

Using a financial calculator:
PV	$  ?	Yields $(147,047)
I	9%
N	6
PMT	$ 28,000
FV	$ 17,000
Type	1

Cost of Goods Sold...................... 121,000

    Inventory...........................           121,000

Cash....................................  28,000

    Lease Payments Receivable...........            28,000