Brief Exercise 21-9

Sweet Corporation enters into a 6-year lease of equipment on January 1, 2017, which requires 6 annual payments of $37,900 each, beginning January 1, 2017. In addition, Sweet guarantees the lessor a residual value of $18,800 at lease-end. The equipment has a useful life of 6 years. Prepare Sweet January 1, 2017, journal entries assuming an interest rate of 10%. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

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Account Titles and Explanation Date January 1, 2017 (To record the lease.) January 1, 2017 (To record first lease payment.) Debit Credit