Entries for Operating Lease—Lessee
Alma Inc. leases some of the equipment it uses. The lease term is five years, and the lease payments are to be made in advance as shown in the following schedule.
|
January 1, 2008 |
$ 50,000 |
|
January 1, 2009 |
50,000 |
|
January 1, 2010 |
70,000 |
|
January 1, 2011 |
90,000 |
|
January 1, 2012 |
120,000 |
|
Total |
$380,000 |
The equipment is to be used evenly over the 5 year period. For each of the five years, give the entry that should be made at the time the lease payment is made to allocate the proper share of rent expense to each period. The lease is classified as an operating lease by Alma Inc.