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On January 1, 2018, Hester Co. sells equipment to Beck Corp. at its fair value of $720,300 and leases it back. The equipment had a
On January 1, 2018, Hester Co. sells equipment to Beck Corp. at its fair value of $720,300 and leases it back. The equipment had a carrying value of $632,500, the lease is for 10 years and the implicit rate is 10%. The lease payments of $106,800 start on January 1, 2018. Hester uses straight-line depreciation and there is no residual value.
Prepare all of Hester's entries for 2018.
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