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Washington Financing, Inc

Question 75

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Washington Financing, Inc. purchased a packing machine to lease to Puyallup Fruits. The lease qualifies as a direct financing lease and requires lease payments of $58,860 per year, payable in advance, over a ten-year period. There is no expected residual value. The fair market value of the packing machine is $330,000--the same amount paid by Washington to purchase the asset. The lease term begins on January 1, 2011.
Provide the journal entries required on Washington's books to
Washington Financing, Inc. purchased a packing machine to lease to Puyallup Fruits. The lease qualifies as a direct financing lease and requires lease payments of $58,860 per year, payable in advance, over a ten-year period. There is no expected residual value. The fair market value of the packing machine is $330,000--the same amount paid by Washington to purchase the asset. The lease term begins on January 1, 2011. Provide the journal entries required on Washington's books to

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