erating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an 4%. e contract calls for four rent payments of $12,500 each, payable semiannually on June 30 and December 31 eac e computers were acquired by ComputerWorld at a cost of $95,000 and were expected to have a useful life of -residual value. th firms record amortization and depreciation semiannually. se tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) d:
erating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an 4%. e contract calls for four rent payments of $12,500 each, payable semiannually on June 30 and December 31 eac e computers were acquired by ComputerWorld at a cost of $95,000 and were expected to have a useful life of -residual value. th firms record amortization and depreciation semiannually. se tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) d:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2024, Nath-Langstrom Services, Incorporated, a computer software training firm, leased several computers under a two-
year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest
rate of 4%.
The contract calls for four rent payments of $12,500 each, payable semiannually on June 30 and December 31 each year.
The computers were acquired by ComputerWorld at a cost of $95,000 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 $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1)
Required:
1. Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease.
2. Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease.
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