On January 1, 2024, Nath-Langstrom Services, Incorporated, 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 6%.

The contract calls for four rent payments of $11,000 each, payable semiannually on June 30 and December 31 each year.

The computers were acquired by ComputerWorld at a cost of $92,000 and were expected to have a useful life of five years with no residual value.

Required:

1. Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease.
2. Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease.