Problem for October 1st, 2021: Leased a commercial processor from UL Lease Corp. The five-year finance lease agreement calls for the company to make quarterly payments of $195,774, payable each October 1, January 1, April 1, July 1, with the first payment at October 1, 2021. The incremental borrowing interest rate is 12%. The company records amortization on a straight-line basis at the end of each fiscal year.

Journal Entry - October 1st:

Debit to Right-of-Use Assets for $3,000,000

Debit to Lease Payable for $195,744

Credit to Lease Payable for $3,000,000

Credit to Cash for $195,744

Adjusting Entry Problem: The company recognizes an adjustment for lease contract on October 1st. Need adjusting entry here for accruals and amortization on December 31st, 2021.