During its fiscal year ending June 30, 2017, the Parkville Independent School District enters into a two year lease for office space covering the period May 1, 2017, through April 30, 2019. Annual rent is $60,000.
The lease specifies that the entire rent for each year is to be paid, in advance, on May 1.
1. Prepare journal entries to record the lease payments and the lease expenditures for fiscal years ending June 30, 2017, 2018, and 2019, assuming that the district uses the consumption method.
2. Prepare journal entries to record the lease payments and the lease expenditures for the same years assuming that the district uses the purchases method.