Bonus Questions (only attempt if time permits): On 1/1/201…
Bonus Questions (only attempt if time permits): On 1/1/2015 Jules Inc enters into a 6-year non-cancellable lease for a piece of machinery owned by Vincent Inc. The lease calls for the following annual payments, payable at the end of each year of the lease: 2015 – $2,000 2016 – $2,000 2017 – $2,000 2018 – $3,000 2019 – $3,000 2020 – $3,000 At the end of the lease, ownership and the right to use the machine reverts back to Vincent, and there is no option to purchase the machine at the end of the lease term. Vincent, Inc. purchased the machine on 12/31/2014 for $50,000, and the economic life of the machine is thought to be 20 years. Both Jules and Vincent use an 8% discount rate for present values. B1: What (if any) journal entries should Vincent record on 12/31/2015? (you can ignore depreciation) B2: What (if any) journal entries should Vincent record on 12/31/2019? (ignoring depreciation)