I asked this question yesterday and I only got a response of one journal entry. There's more than one. The help given was incomplete or wrong. Keller Corporation (the lessee) entered into a general equipment lease with Dallo Company (the lessor) on January 1 of Year 1. The following information pertains to this lease agreement:1.The equipment reverts back to the lessor at the end of the lease, and there is no bargain purchase option.2.The lease term is 8 years and requires annual payments of $10,000 at the beginning of each year.3.The fair value of the equipment at lease inception is $100,000. Assume that the present value of lease payments discounted at a 10% interest rate is $58,684.19.4.The equipment has an estimated economic life of 20 years and has zero residual value at the end of this time. Required: Prepare the journal entry that Keller Corporation would make during the first year of the lease assuming that the lease is classified as an operating lease.

Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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I asked this question yesterday and I only got a response of one journal entry. There's more than one. The help given was incomplete or wrong.

Keller Corporation (the lessee) entered into a general equipment lease with Dallo Company (the lessor) on January 1 of Year 1. The following information pertains to this lease agreement:

1.	The equipment reverts back to the lessor at the end of the lease, and there is no bargain purchase option.
2.	The lease term is 8 years and requires annual payments of $10,000 at the beginning of each year.
3.	The fair value of the equipment at lease inception is $100,000. Assume that the present value of lease payments discounted at a 10% interest rate is $58,684.19.
4.	The equipment has an estimated economic life of 20 years and has zero residual value at the end of this time.

Required:

Prepare the journal entry that Keller Corporation would make during the first year of the lease assuming that the lease is classified as an operating lease.

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