On 1/1/20 Martin leased computer equipment from Diggins with a 4 year lease. Lease Payments of $10,000 are due on 12/31 and start on 1/1/2020. Martin used 3% interest rate to account for the lease. The useful life of the equipment is 8 years. Assume the fair value is $45,000. Both companies have a 12/31 year end. THIS IN AN OPERATING LEASE. 1. Record the journal entries for Diggins (the lessee) for 2020 and 2021. 2. Show the lease on Diggins B/S AND I/S for 2021.
On 1/1/20 Martin leased computer equipment from Diggins with a 4 year lease. Lease Payments of $10,000 are due on 12/31 and start on 1/1/2020. Martin used 3% interest rate to account for the lease. The useful life of the equipment is 8 years. Assume the fair value is $45,000. Both companies have a 12/31 year end. THIS IN AN OPERATING LEASE. 1. Record the journal entries for Diggins (the lessee) for 2020 and 2021. 2. Show the lease on Diggins B/S AND I/S for 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do for Martin and NOT Diggins. I will rate and review! Thanks :)
Transcribed Image Text:On 1/1/20 Martin leased computer equipment from Diggins with a 4 year lease. Lease Payments of $10,000 are due on 12/31 and start on 1/1/2020.
Martin used 3% interest rate to account for the lease. The useful life of the equipment is 8 years. Assume the fair value is $45,000. Both companies have
a 12/31 year end. THIS IN AN OPERATING LEASE.
1. Record the journal entries for Diggins (the lessee) for 2020 and 2021.
2. Show the lease on Diggins B/S AND I/S for 2021.
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