Accounting for Leases On July 1, 2014, Stokes Company leased a warehouse buildin

Question

Accounting for Leases
On July 1, 2014, Stokes Company leased a warehouse building under a 20-year lease agreement. The lease requires quarterly lease payments of $5,500. The first lease payment is due on September 30, 2014. The lease was reported as a capital lease using a 4% annual interest rate.

Required

b. Prepare the journal entries that would be necessary on September 30 and December 31, 2014.
(Use rounded answer from above for subsequent calculations. Round your answers to the nearest dollar.)

Explanation / Answer

Accounting for Leases On July 1, 2014, Stokes Company leased a warehouse buildin

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