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Southern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Other information: Lease term 3 years Annual payments $40,000 on January 1 each

Southern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018.

Other information:

Lease term 3 years

Annual payments $40,000 on January 1 each year

Life of asset 3 years

Implicit interest rate 8%

There is no expected residual value.

Required: Prepare appropriate journal entries for Southern Edison for 2018 and 2019. Assume straight-line amortization and a December 31 year-end. Round your answers to the nearest whole dollar amounts. Please show work

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