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In: Accounting

On January 1, year 1, Mitchell-Marsh Services, Inc., a computer software training firm, leased several computers...

On January 1, year 1, Mitchell-Marsh Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from Global Computers Corporation, which routinely finances equipment for other firms at an annual interest rate of 8%. The contract calls for four rent payments of $15,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by Global Computers at a cost of $120,000 and were expected to have a useful life of six years with no residual value. Both firms record amortization and depreciation semiannually.

Prepare the appropriate entries for both (a) the lessee and (b) the lessor through the end of year 1.

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ekkarill92 answered 1 year ago
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