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On December 31, 2019 A company leases trailers to B Company under a five-years The ownership pass to company A at the end of the

On December 31, 2019 A company leases trailers to B Company under a five-years

The ownership pass to company A at the end of the lease.

The undiscouned minimum lease payment = 64.1 million

interest rate = 3.28% (present value factor for 5 periods at 3.28% is 4.717).

Residual value= 0

Estimated useful life= 6

Depreciation methods = straight-line method

Requirements:

1-Calculate the annual lease amortization schedule (for company A and B)

2- Write entries relating to the lease agreement for the first two years of the lease (for company A and B)

3- Write section relating to the lease transactions (in the balance sheet) at the end of the second year (for company A and B)

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