Lease Illustration #2
Journal entries, first period, lessor, net approach. From a properly prepared amortization table:
1/1/x1
Lease receivable 120,000 (PV MLP)
Leased asset 120,000
To record lease inception
12/31/x1
Cash 49,962
Interest revenue 14,400
Lease receivable 35,562
*Depreciation Expense is not recorded by lessor