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Assume that a company leases equipment for a 5-year period under a capital lease and agrees to pay an annual rental of $16,000 at the

Assume that a company leases equipment for a 5-year period under a capital lease and agrees to pay an annual rental of $16,000 at the end of each year. If the present value of the lease payments is $59,200, the entry to record the leasing transaction would include:

  • A credit to Rent Payable of $16,000
  • A debit to Leased Equipment of $80,000
  • A debit to Lease Expense of $59,200
  • A debit to Leased Equipment of $59,200

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