9. A Company leased equipment from B Leasing on January 1, 2021. B recently purchased the equipment at a cost of $248,320.

Other information:

Lease term 3 years

Payments $90,000 on January 1/2021,12/31/2021 and 12/31/2022

Life of asset 3 years

Fair value of asset $248,320

Implicit interest rate 9%

There is no expected residual value.

Required: (Show the computing process and precise journal entries)

A. Prepare the appropriate journal entries for B Leasing for 2021, 2022, and 2023 calendar year ends.

B. Prepare the appropriate journal entries for A Company for 2021, 2022, and 2023 calendar year ends.