Required: 1. Prepare appropriate Journal entries recorded by Nath-Langstrom Services for the first year of the lease. 2. Prepare appropriate Journal entries recorded by ComputerWorld Leasing for the first year of the lease.

Required: 1. Prepare appropriate Journal entries recorded by Nath-Langstrom Services for the first year of the lease. 2. Prepare appropriate Journal entries recorded by ComputerWorld Leasing for the first year of the lease.

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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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

On January 1, 2024, Nath-Langstrom Services, Incorporated, 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 $16,000 each, payable semiannually on June 30 and December 31 each year.
• The computers were acquired by ComputerWorld at a cost of $102,000 and were expected to have a useful life of six years with
no residual value.
.
Both firms record amortization and depreciation semiannually.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1)
Required:
1. Prepare appropriate Journal entries recorded by Nath-Langstrom Services for the first year of the lease.
2. Prepare appropriate Journal entries recorded by ComputerWorld Leasing for the first year of the lease.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease.
Note: 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.)
View transaction list
Journal entry worksheet
<
1
2
3 4
Date
Record the beginning of the lease for Nath-Langstrom Services.
Note: Enter debits before credits.
5
1
General Journal
Debit
Credit

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