ML leased a computer to LH on January 1, 2014.The lease was a five year fixed, non-cancellable agreement.The payments were finalized at $2,380 per year with the first payment on January 1, 2014 and ML paid $9,500 for the computer.Carrying value is equal to fair value and there was a guaranteed residual value by lessee of $2,000.The lease is deemed a finance lease.Based on the above information, what type of lease is this for the lessor? Prepare the journal entries for at the inception of the lease using the gross method.

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The Answer of ML leased a computer to LH on January 1, 2014.The lease was a five year fixed, non-cancellable agreement.The payments were finalized at $2,380 per year with the first payment on January 1, 2014 and ML paid $9,500 for the computer.Carrying value is equal to fair value and there was a guaranteed residual value by lessee of $2,000.The lease is deemed a finance lease.Based on the above information, what type of lease is this for the lessor? Prepare the journal entries for at the inception of the lease using the gross method.

ML Leased a Computer to LH on January 1, 2014