Business, 13.10.2020 05:01 AvreeanaS1379

Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Third Bank purchased the equipment at a cost of $1,000,000. Chance elected the short-term lease option. Appropriate adjusting entries are made annually. Related Information:

Lease term 1 year (4 quarterly periods)
Quarterly lease payments $40,000 at Jan. 1, 2018, and at Mar. 31, June 30, and Sept. 30.
Economic life of asset 5 years
Interest rate charged by the lessor 8%

Required:
Prepare appropriate entries for Chance from the beginning of the lease through December 31, 2018.

Answers: 2

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Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Third Bank purchased...