The following relate to an operating lease agreement: a. The lease term is 3 years, beginning January 1, 2016. b. The leased asset cost the lessor $800,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets. c. Annual lease payments at the beginning of each year were $137,000. d. Costs of negotiating and consummating the completed lease transaction incurred by the lessor were $2,400. Required: Prepare the appropriate entries for the lessor from the inception of the lease through the end of the lease term.

Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter10: Long-term Liabilities
Section: Chapter Questions
Problem 10.5AP
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The following relate to an operating lease agreement: a. The lease term is 3 years, beginning January 1, 2016. b. The leased asset cost the lessor $800,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets. c. Annual lease payments at the beginning of each year were $137,000. d. Costs of negotiating and consummating the completed lease transaction incurred by the lessor were $2,400. Required: Prepare the appropriate entries for the lessor from the inception of the lease through the end of the lease term.

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