On January 1, 2016, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers from ComputerWorld Corporation under a two-year operating lease agreement. The contract calls for four rent payments of $10,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $90,000 and were expected to have a useful life of six years with no residual value. Required: Prepare the appropriate entries for both (a) the lessee and (b) the lessor from the inception of the lease through the end of 2016. (Use straight-line depreciation.)
On January 1, 2016, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers from ComputerWorld Corporation under a two-year operating lease agreement. The contract calls for four rent payments of $10,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $90,000 and were expected to have a useful life of six years with no residual value. Required: Prepare the appropriate entries for both (a) the lessee and (b) the lessor from the inception of the lease through the end of 2016. (Use straight-line depreciation.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2016, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers from ComputerWorld Corporation under a two-year operating lease agreement. The contract calls for four rent payments of $10,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $90,000 and were expected to have a useful life of six years with no residual value. Required: Prepare the appropriate entries for both (a) the lessee and (b) the lessor from the inception of the lease through the end of 2016. (Use straight-line
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