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A firm enters a lease on January 1, 2017, that requires three annual payments of $20,000 (starting December 31, 2017). a) Show all journal entries

A firm enters a lease on January 1, 2017, that requires three annual payments of $20,000 (starting December 31, 2017).

a) Show all journal entries assuming that the lease is classified as an operating lease

b) Show the journal entry on the date the lease is signed if the lease is a capital lease (assume effective interest rate on the lease of 12%)

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