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Company A leased equipment from Company B on January 1, 2021....

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Accounting

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Company A leased equipment from Company B on January 1, 2021. Company B manufactured the equipment at a cost of $200,000. Appropriate adjusting entries are made semiannually. The Lease term is 4 years with semiannual rent payments of 32,000 at January 1, 2021, June 30, 2021, and every half- year thereafter. The economic life of the asset is 4 years and the implicit interest rate is 8%. 1) Prepare the appropriate journal entries for Company A (the Lessee) to record this transaction at its beginning, January 1, 2021 and on June 30, 2021. 2) Prepare the appropriate journal entries Company B (the Lessor) to record this transaction at its beginning, January 1, 2021 and on June 30, 2021

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