Nash Company leased equipment from Costner Company. The lease term is 4 years an

Question

Nash Company leased equipment from Costner Company. The lease term is 4 years and requires equal rental payments of $54,883 at the beginning of each year. The equipment has a fair value at the inception of the lease of $189,000, an estimated useful life of 4 years, and no salvage value. Nash pays all executory costs directly to third parties. The appropriate interest rate is 11%. Prepare Nash's January 1, 2017, journal entries at the inception of the lease. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Debit Credit Date Account Titles and Explanation January 1, 2017 (To record the lease.) January 1, 2017 (To record first lease payment.)

Explanation / Answer

Journal entry :

date account titles and explanation debit credit Jan 1,2017 Lease equipment a/c 189000      Lease liability 189000 (TO record the lease) Jan 1,2017 Lease liability a/c 54883      Cash a/c 54883 (To record first lease payment)

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.