TB Problem 15-204 (Algo) Big Bucks leased equipment to

Big Bucks leased equipment to Shannon Company on July 1, 2024. The lease payments were calculated to provide the lessor a 10% return. Ten annual lease payments of $45,000 are due each July 1, beginning July 1, 2024.

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 the journal entries to record the lease by Shannon on July 1, 2024, and on December 31, 2024, the end of the reporting period. Consider this to be a finance lease.
2. Prepare the journal entries to record the lease by Shannon on July 1, 2024, and on December 31, 2024, the end of the reporting period. Consider this to be an operating lease.

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar