Marin Company leased equipment from Costner Company, beginning on December 31, 2016. The lease term...
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Marin Company leased equipment from Costner Company, beginning on December 31, 2016. The lease term is 4 years and requires equal rental payments of $108,765 at the beginning of each year of the lease, starting on the commencement date (December 31, 2016). The equipment has a fair value at the commencement date of the lease of $370,000, an estimated useful life of 4 years, and no estimated residual value. The appropriate interest rate is 12%.
Prepare Marins 2016 and 2017 journal entries, assuming Marin depreciates similar equipment it owns on a straight-line basis.
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