Hatfield Corporation leases a tractor from Star Leasing with a five-year non-cancelable lease on January 1, 20X1 under the following terms.   Five payments of $26,379.74 (a 9% implicit rate) due at the end each year. The fair value of the tractor is $100,000. The lease is nonrenewable and the tractor reverts to Star at the end of the lease term. The tractor has a six-year economic life. Hatfield has an excellent credit rating. Star offers no warranty on the tractor other than the manufacturer’s two-year warranty that is handled directly with the manufacturer.   With which one of the following entries will Hatfield prepa

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.