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On January 1 , 2 0 1 6 , Pearson Company signed a lease agreement requiring six annual payments of $ 6 0 , 0

On January 1,2016, Pearson Company signed a lease agreement requiring six annual payments of $60,000, beginning December 31,2016. The lease qualifies as a capital operating lease. Pearson's incremental borrowing rate was 9%. Pearson Company uses the straight-line method to record depreciation on similar equipment. Estimated life is six years.
a. prepare journal entry required January 1,2016.
b. prepare journal entries required December 31,2016.
c. prepare journal entries required December 31,2017.

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