Exercise 15-17 (Algo) Lessee and lessor; operating lease [LO15-4] On January 1, 2021, Nath-Langstrom Services, Inc., 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 $14,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $99,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually. (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 tables provided.) 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.
Exercise 15-17 (Algo) Lessee and lessor; operating lease [LO15-4] On January 1, 2021, Nath-Langstrom Services, Inc., 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 $14,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $99,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually. (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 tables provided.) 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 15-17 (Algo) Lessee and lessor; operating lease [LO15-4]
On January 1, 2021, Nath-Langstrom Services, Inc., 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 $14,500 each, payable semiannually on June 30 and December 31 each year. The
computers were acquired by ComputerWorld at a cost of $99,000 and were expected to have a useful life of five years with no
residual value. Both firms record amortization and depreciation semiannually. (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 tables provided.)
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1341decc-8dec-4d41-bf9b-f8cce7b2aabd%2Fa163a272-97a6-4381-9866-56c0f2fa2e4f%2Fa0buhczp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 15-17 (Algo) Lessee and lessor; operating lease [LO15-4]
On January 1, 2021, Nath-Langstrom Services, Inc., 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 $14,500 each, payable semiannually on June 30 and December 31 each year. The
computers were acquired by ComputerWorld at a cost of $99,000 and were expected to have a useful life of five years with no
residual value. Both firms record amortization and depreciation semiannually. (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 tables provided.)
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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