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On January 1 , 2 0 2 4 , Taco King leased retail space from Fogelman Properties. The 1 0 - year finance lease requires

On January 1,2024, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 3% of Taco Kings sales revenue, with a quarterly sales minimum of $570,000. Payments at the beginning of each quarter are based on previous quarter sales. During the previous five-year period, Taco King has generated quarterly sales of over $735,000. Fogelmans interest rate, known by Taco King, was 8%.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
Prepare the journal entries for Taco King at the beginning of the lease on January 1,2024.
Prepare the journal entries for Taco King on April 1,2024. First quarter sales were $745,000. Amortization is recorded quarterly.

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