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Lease payments for the new company car have been capitalized. Monthly payments are $400 for the three-year lease. 10 monthly payments have been made so
Lease payments for the new company car have been capitalized. Monthly payments are $400 for the three-year lease. 10 monthly payments have been made so far. If BHI had purchased the car, it would have cost $30,000. The car has an expected useful life of six years. Depreciation has not yet been recorded. Current interest rate is 6%.
Record journal entries for this transaction and how it will affect revenue/earnings.
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