On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 6%. The contract calls for four rent payments of $11,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $93,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually.Required:1. Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease.Record the beginning of the lease for Nath-Langstrom Services (January 1, 2021).Record the lease payment made by Nath-Langstrom Services (June 30, 2021).Record amortization for Nath-Langstrom Services (June 30, 2021).Record the lease payment made by Nath-Langstrom Services (December 31, 2021).Record amortization for Nath-Langstrom Services (December 31, 2021).2. Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease.Record the lease payment received by ComputerWorld Leasing (June 30, 2021).Record depreciation for ComputerWorld Leasing (June 30, 2021).Record the lease payment received by ComputerWorld Leasing (December 31, 2021).Record depreciation for ComputerWorld Leasing (December 31, 2021).

Journal entry: Journal entry is the book of original entry where first transactions are recorded in…

Answered: Prepare appropriate journal entries…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 2RE: Yankee Corp. agrees to provide Albany Company 24 months of coaching services. The contract sets the...

See similar textbooks

Related questions

Question

On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 6%. The contract calls for four rent payments of $11,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $93,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually.

Required:

1. Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease.

Record the beginning of the lease for Nath-Langstrom Services (January 1, 2021).
Record the lease payment made by Nath-Langstrom Services (June 30, 2021).
Record amortization for Nath-Langstrom Services (June 30, 2021).
Record the lease payment made by Nath-Langstrom Services (December 31, 2021).
Record amortization for Nath-Langstrom Services (December 31, 2021).

2. Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease.

Record the lease payment received by ComputerWorld Leasing (June 30, 2021).
Record depreciation for ComputerWorld Leasing (June 30, 2021).
Record the lease payment received by ComputerWorld Leasing (December 31, 2021).
Record depreciation for ComputerWorld Leasing (December 31, 2021).

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions