On January 1, 2018, Company LL enters into a lease agreement for machinery with a lease term
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Question:
On January 1, 2018, Company LL enters into a lease agreement for machinery with a lease term of 8 years and annual lease payments of $150,000, payable at the beginning of each year. The interest rate implicit in the lease is 5.5 percent. The machinery has a fair value of $1,200,000.
Prepare the journal entries to record the lease at inception, the first lease payment, and the interest expense for the first year.
Related Book For
Intermediate Accounting
ISBN: 978-1119048541
11th Canadian edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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