1)Record the beginning of the lease for Nath-Langstrom Services.Jan,1,2018 2)Rec

Question

1)Record the beginning of the lease for Nath-Langstrom Services.Jan,1,2018
2)Record the lease payment and interest expense for Nath-Langstrom Services. June,30,2018
3)Record the amortization expense for Nath-Langstrom Services.June 30,2018
4)Record the lease payment and interest expense for Nath-Langstrom Services. Dec,31,2018
5)Record the amortization expense for Nath-Langstrom Services. Dec, 31,2018
6)Record the lease revenue received by ComputerWorld Leasing. June 30,2018
7)Record the Depreciation expense for ComputerWorld Leasing. June 30,2018
8) Record the lease revenue received by ComputerWorld Leasing. Dec,31,2018
9)Record the Depreciation expense for ComputerWorld Leasing. Dec 31. 2018

r 15 Homework Assignment Help Save Saved CI On January 1, 2018, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a t wo-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other fi irms 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 yea r. The computers were acquired by ComputerWorld at a cost of $93,000 and were expected to have a useful life residual value. Both firms record depreciation semi-annually PVAD of $1) (Use appropriate factor(s) from the tables provided.) of Five years with no ation and depreciation semi-annually FV of $1, PV of S1, FVA of $1, PVA of $1, FVAD of $1 and Required Prepare the appropriate entries for both the lessee and the lessor from the beginning of the lea entry is required for a transaction/even calculations to the nearest whole dollar amount.) t, select "No journal entry required" in the first account field. Round your intermediate View transaction list Journal entry worksheet 6 7 9 Record the beginning of the lease for Nath-Langstrom Services. K Prev 8 of 9Next > to search

Explanation / Answer

Semiannual periods = 2 years*2 = 4 periods

Semiannual interest rate = 6%*6/12 = 3%

Lease payable to be recorded in the books of Nath-Langstrom services = Semiannual Payment*PVAF(3%, 4)

= $11,500*3.717098 = 42,747

Journal Entries (Amounts in $)

No. Date General Journal Debit Credit 1 Jan 01, 2018 Right of use asset 42,747 Lease payable 42,747 2 June 30, 2018 Interest expense (42,747*3%) 1,282 Lease payable (11,500-1,282) 10,218 Cash 11,500 3 June 30, 2018 Amortization expense 10,218 Right of use asset 10,218 4 Dec 31, 2018 Interest expense [42,747-10,218)*3%] 976 Lease payable ($11,500-$976) 10,524 Cash 11,500 5 Dec 31, 2018 Amortization expense 10,524 Right of use asset 10,524 6 June 30, 2018 Cash 11,500 Rent revenue 11,500 7 June 30, 2018 Depreciation expense ($93,000/10 semiannual periods) (i.e. 5 yrs life) 9,300 Accumulated depreciation 9,300 8 Dec 31, 2018 Cash 11,500 Rent revenue 11,500 9 Dec 31, 2018 Depreciation expense ($93,000/10 periods) 9,300 Accumulated depreciation 9,300

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