Jana Kingston Corporation enters into a lease on January 1, 2011, that does not transfer ownership or

Question:

Jana Kingston Corporation enters into a lease on January 1, 2011, that does not transfer ownership or contain a bargain-purchase option. It covers 3 years of the equipment’s 8-year useful life, and the present value of the minimum lease payments is less than 80% of the fair value of the asset leased. Prepare Jana Kingston’s journal entry to record its January 1, 2011, annual lease payment of €35,000.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...