3. Landon Corporation has decided to rent crew trucks rather than purchasing them. On April...
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3. Landon Corporation has decided to rent crew trucks rather than purchasing them. On April 1, 20X5, Landon enters into an agreement with TuffEnough Trucks to lease three trucks worth $200,000. The lease agreement will span six years and the life of the trucks is estimated to be seven years. Landons incremental borrowing rate is 6 percent. The payments per year amount to $38,370, payable each April 1, beginning with 20X5.
a. Record the capital lease.
b. Record the first payment on 4/1/X5.
c. Record depreciation on the equipment on 12/31/X5.
d. Record interest expense on 12/31/X5.
e. Record the second payment on 4/1/X6.
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