Problem Seven Samuel Corporation leases photocopy equipment from Joshua Corporation at $24,000 per year for 3 years beginning January 1, 2017. The payments are to be made each December 31, beginning in 2017. The lease agreement meets the criteria for a finance lease. The equipment is to be depreciated straight-line over three years. Assuming a 6% rate of interest, Required: a) Record the entry for the leasing of the equipment on January 1, 2017. b) Record the adjusting entry for depreciation on December 31, 2017. c) Record the entry to record the first two lease payments.

Problem Seven Samuel Corporation leases photocopy equipment from Joshua Corporation at $24,000 per year for 3 years beginning January 1, 2017. The payments are to be made each December 31, beginning in 2017. The lease agreement meets the criteria for a finance lease. The equipment is to be depreciated straight-line over three years. Assuming a 6% rate of interest, Required: a) Record the entry for the leasing of the equipment on January 1, 2017. b) Record the adjusting entry for depreciation on December 31, 2017. c) Record the entry to record the first two lease payments.

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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