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 6%. The contract calls for four rent payments of $14,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $98,000 and were expected to have a useful life of seven 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. Journal entry worksheet Record the beginning of the lease for Nath-Langstrom Services. Record the leases payment made by Nath-Langstrom Services. Record Amortization for Nath-Langstrom Services. Record the lease payment made by Nath-Langstrom Services. Record amortization for Nath-Langstrom Service. 2.Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field). Round your intermediate calculations and final answers to the nearest whole dollar.) Journal entry worksheet Record the lease payment received by ComputerWorld Leasing. Record depreciation for ComputerWorld Leasing. Record the lease payment received by ComputerWorld Leasing. Record depreciation for ComputerWorld Leasing.
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 6%. The contract calls for four rent payments of $14,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $98,000 and were expected to have a useful life of seven years with no residual value. Both firms record amortization and
Required:
1.Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease.
- Record the beginning of the lease for Nath-Langstrom Services.
- Record the leases payment made by Nath-Langstrom Services.
- Record Amortization for Nath-Langstrom Services.
- Record the lease payment made by Nath-Langstrom Services.
- Record amortization for Nath-Langstrom Service.
2.Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field). Round your intermediate calculations and final answers to the nearest whole dollar.)
Journal entry worksheet
- Record the lease payment received by ComputerWorld Leasing.
- Record depreciation for ComputerWorld Leasing.
- Record the lease payment received by ComputerWorld Leasing.
- Record depreciation for ComputerWorld Leasing.
Lease is defined a contractual agreement incorporated between two business entities where one entity provides an asset for use to another entity in exchange of periodic payments. The entity taking the asset on lease is referred to as lessor and the entity giving the asset on lease is defined as lessee. The asset may be leased for short term or long-term depending upon the usage and terms of lease contract.
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