On January NathLangstrom Services, Incorporated, a computer software training firm, leased several computers under a twoyear operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of
The contract calls for four rent payments of $ each, payable semiannually on June and December each year.
The computers were acquired by ComputerWorld at a cost of $ and were expected to have a useful life of five years with no residual value.
Both firms record amortization and depreciation semiannually.
Note: Use tables, Excel, or a financial calculator. FV of $ PV of $ FVA of $ PVA of $ FVAD of $ and PVAD of $
Required:
Prepare appropriate journal entries recorded by NathLangstrom Services for the first year of the lease.
Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease.
