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On January 1, 2018, Winn Heat Transfer leased office space under a three year operating lease...

On January 1, 2018, Winn Heat Transfer leased office space under a three year operating lease agreement. The arrangement specified three annual rent payments of $90,000 each, beginning December 31, 2018, and at each December 31 through 2020. The lessor, HVAC Leasing calculates lease payments based on an annual interest rate of 8%. Winn also paid a $300,000 advance payment at the beginning of the lease in addition to the first $90,000 rent payment. With permission of the owner, Winn made structural modifications to the building before occupying the space at a cost of $390,000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value.

1. Record the beginning of the lease Jan 2018

2. Record the lease payment Jan 2018

3. Record the lease and interest payment Dec 2018

4.Record the amortization of the right to use asset Dec 2018

5.Record the depreciation expense for Winn 2018

6.Record the lease and interest payment 2019

7. Record the amortization of the right to use asset Dec 2019

8. Record the depreciation expense for Winn 2019

9.Record the lease and interest payment 2020

10. Record the amortization of the right to use asset Dec 2020

11. Record the depreciation expense for Winn 2020

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