On January 1, 2018, Nath-Langstrom Services, Inc. a computer software training firm, leased several computersunder a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipmentfor other firms at an annual interest rate of 4%. The contract calls for four rent payments of $10,000 each, payablesemiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a costof $90,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually.Required:Prepare the appropriate entries for both (a) the lessee and (b) the lessor from the beginning of the lease throughthe end of 2018.
On January 1, 2018, 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 $10,000 each, payable
semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost
of $90,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and
Required:
Prepare the appropriate entries for both (a) the lessee and (b) the lessor from the beginning of the lease through
the end of 2018.
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