Current Attempt in Progress Question $8$ of $15$

List of Accounts

Accounts Payable

Accounts Receivable

Accumulated Depreciation$-$Buildings

Accumulated Depreciation$-$Equipment

Allowance for Doubtful Accounts

Bad Debt Expense

Bonds Payable

Buildings

Cash

Cash Dividends

Common Stock

Depreciation Expense

Discount on Bonds Payable Question $7$ of $15$

Interest Expense

Interest Payable

Inventory

Lawsuit Liability

Lawsuit Loss

Long$-$term Debt

Mortgage Payable

No Entry

Notes Payable

Other Operating Expenses

Owner's Capital

Payroll Tax Expense

Pension Expense

Pension Liability Question $8$ of $15$

Other Operating Expenses

Paid$-$in Capital in Excess of Par$-$Common Stock

Paid$-$in Capital in Excess of Par$-$Preferred Stock

Preferred Stock

Premium on Bonds Payable

Rent Expense

Rent Revenue

Retained Earnings

Right$-$of$-$Use$-$Asset

Salaries and Wages Expense

Salaries and Wages Payable

Sales Revenue

Treasury Stock

Unearned Rent Revenue

On January $1,2027,$ Carla Vista Inc. entered into an agreement to lease $20$ computers from Drummond Electronics. The terms of the

lease agreement require three annual rental payments of $$40,000($including $10\%$ interest$)$ beginning December $31,2027.$ The present

value of the three rental payments is $$99,472.$ Carla Vista considers this a finance lease.

Prepare the journal entry to record the lease agreement on the books of Carla Vista Inc. on January $1,2027.($Credit account titles are

automatically indented when amount is entered. Do not indent manually.$)$

Date Account Titles and Explanation

Debit

Credit

Jan. $1$

List of Accounts

Accounts Payable

Accounts Receivable

Accumulated Depreciation$-$Buildings

Accumulated Depreciation$-$Equipment