On January 1, 2020, TQF sold a truck to Pioneer Finance Corp. for
$ 65,000 and immediately leased it back. The truck was carried on TQF's book at $ 53,000, net of $ 26,000 accumulated depreciation. The term of the lease is five years, and title will transfer to TQF at the end of the lease. The lease requires five equal payments of $ 17,147, with each payment made at year end. The appropriate rate of interest is 10%, and the truck has a useful life of five years with no salvage value.
Is there a way to explain the financial implications?
Can there be Journal entries from this?
Under ASPE, can any part of this question be referred to in the CPA Handbook?
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