Chapter 15 handout Smith Co. purchased a new office building by signing a $500,000,7%, mortgage note payable on January 1, 2019. The terms provide for semiannual installment payments of $50,000 on June 30 and December 31. Prepare the journal entry to record the purchase of the building. Prepare the journal entry for the first payment. Date Description Debit Credit Prepare the journal entry for the second payment. Date Description Debit Credit On January 1, 2019, Wesson Corporation signed a 5-year noncancelable lease for an office building. The lease requires 10 annual payments of $60,000. This lease qualifies as a capital lease. Prepare the journal entry to record this lease, assuming an interest rate of 8%. The present value of the minimum lease payments is $402,605. Date Description Debit Credit Prepare the journal entry for the first lease payment on December 31, 2019. Date Description Debit Credit Prepare the journal entry for the second lease payment on December 31, 2020. Date Description Debit Credit