Brief Exercise 21-5

Jana Kingston Corporation enters into a lease on January 1, 2014, that does not transfer ownership or contain a bargain-purchase option. It covers 3 years of the equipments 8-year useful life, and the present value of the minimum lease payments is less than 90% of the fair value of the asset leased. Prepare Jana Kingstons journal entry to record its January 1, 2014, annual lease payment of $35,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)