1. Senario 1

   ABC Inc. leased a drilling equipment form a regional oil services company. The oil company purchased the drilling equipment from an international drilling equipment manufacturer at a cost of590,078 SR. The following information is given:

   What is the Entry for the First Payement (Lessee side)

   Given these information

   Lease term :	3 years
   Payment frequency:	semiannual (at the end of the periods)
   Economic life of the asset	Three years
   Payment amount:	120,000 SR
   Rate (lessors and the lowest rate)	12%

   		Lease Payable 35,404 Interst Expense 84,595 Cash 120,000
   		Lease Recivable 120,000 Cash 120,0000
   		Cash 120,000 Interset Expense 120,000
   		Interset Expense 120,000 Interest Revenue 120,000