On January 1, 2018, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $20,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $110,000 and were expected to have a useful life of Eight years with no residual value. Both firms record amortization and depreciation semi-annually.

Required: Prepare the appropriate entries for both the lessee and the lessor from the beginning of the lease through the end of 2018.

1

Record the beginning of the lease for Nath-Langstrom Services.

2

Record the lease payment and interest expense for Nath-Langstrom Services.

3

Record the amortization expense for Nath-Langstrom Services.

4

Record the lease payment and interest expense for Nath-Langstrom Services.

5

Record the amortization expense for Nath-Langstrom Services.

6

Record the lease revenue received by ComputerWorld Leasing.

7

Record the Depreciation expense for ComputerWorld Leasing.

8

Record the lease revenue received by ComputerWorld Leasing.

9

Record the Depreciation expense for ComputerWorld Leasing.