Problem Seven

Samuel Corporation leases photocopy equipment from Joshua Corporation at $$24,000$ per year for $3$ years beginning January $1,2017.$ The payments are to be made each December $31,$ beginning in $2017.$ The lease agreement meets the criteria for a finance lease. The equipment is to be depreciated straight$-$line over three years. Assuming a $6\%$ rate of interest,

Required:

a$)$ Record the entry for the leasing of the equipment on January $1,2017.$

b$)$ Record the adjusting entry for depreciation on December $31,2017.$

c$)$ Record the entry to record the first two lease payments.