Journal Entries for a Capital Lease—Lessee
Refer to Practice 15 6. Assume that the lease is to be accounted for as a capital lease. Also assume that the leased asset is to be amortized over the 12 year asset life rather than the 10 year lease term. Make the journal entries necessary on the books of the lessee company (1) on the lease signing date and (2) at the end of the first year, including the recording of the first lease payment.
Practice 15 6
Journal Entries for an Operating Lease—Lessee
On January 1, the lessee company signed an operating lease contract. The lease contract calls for $3,000 payments at the end of each year for 10 years. The rate implicit in the lease is 10%. Make the journal entries necessary on the books of the lessee company (1) on the lease signing date and (2) to record the first lease payment.