On January 1, 2021, Company A leased equipment under a three-year operating lease agreement from...
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On January 1, 2021, Company A leased equipment under a three-year operating lease agreement from Company B, which routinely finances equipment for other firms at an annual interest rate of 6%. The contract calls for four rent payments of $11,000 each, payable semiannually on June 30 and December 31 each year. The equipment was acquired by Company B at a cost of $100,000 and was expected to have a useful life of ten years with no residual value. Both firms record amortization and depreciation semiannually.
Prepare the appropriate journal entries recorded by Company B for the first year of the lease.
Label and type out the journal entries described above. Round to the nearest whole number.
For example type Journal Entries in the following manner (with dr denoting debits and cr denoting credits
Dr. Depreciation Expense 432
Cr. Accumulated Depreciation 432
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