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The city of Brock’s Water Enterprise Fund leases water treatment equipment. The life of the noncancel-lable...

The city of Brock’s Water Enterprise Fund leases water treatment equipment. The life of the noncancel-lable lease is 10 years, and the expected life of the equipment is 12 years. Using an 8 percent interest rate, the present value of the lease payments is $905,861. The first payment of $125,000 is due when the lease begins, January 5, 2018. An additional payment is due on January 5th for each of the next 9 years. Prepare journal entries to record:

1. The lease of the equipment on January 5, 2018.

2. The first lease payment on January 5, 2018.

3. Amortization expense for fiscal year ending December 31, 2018

4. The second lease payment on January 5, 2019

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ekkarill92 answered 1 year ago
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