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On January 1, 2018, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under...

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Accounting

On January 1, 2018, Nath-Langstrom Services, Inc., a computersoftware training firm, leased several computers under a two-yearoperating lease agreement from ComputerWorld Leasing, whichroutinely finances equipment for other firms at an annual interestrate of 4%. The contract calls for four rent payments of $17,500each, payable semiannually on June 30 and December 31 each year.The computers were acquired by ComputerWorld at a cost of $105,000and were expected to have a useful life of Six years with noresidual value. Both firms record amortization and depreciationsemi-annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of$1 and PVAD of $1) (Use appropriate factor(s) from the tablesprovided.)

Required: Prepare the appropriate entries for both the lesseeand the lessor from the beginning of the lease through the end of2018. (If no entry is required for a transaction/event, select "Nojournal entry required" in the first account field. Round yourintermediate calculations to the nearest whole dollar amount.)

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4.2 Ratings (597 Votes)
Present value of an annuity of 1 n 4 i 2 is 380773 In the books of NathLangstromLessee Date Account titles and explanation Debit Credit Jan 1 2018 Rightofuse asset 17500 380773 66635 Lease payable 66635 Jun 30 2018    See Answer
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