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*Ex. 21-62—Sale-leaseback.
On January 1, 2004, Hayden Co. sells machinery to Colt Corp. at its fair value of $1,440,000 and leases it back. The machinery had a carrying value of $1,260,000, the lease is for 10 years and the implicit rate is 10%. The lease payments of $213,000 start on January 1, 2004. Hayden uses straight-line depreciation and there is no residual value.

(a)     Prepare all of Hayden's entries for 2004.
(b)     Prepare all of Colt's entries for 2004.

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