Kurt Company leased machinery to Smith Company on July 1, 2015, for a ten-year period...
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Kurt Company leased machinery to Smith Company on July 1, 2015, for a ten-year period expiring June 30, 2025. Equal annual payments under the lease are $150,000 and are due on July 1 of each year. The first payment was made on July 1, 2013. The rate of interest used by Kurt and Smith is 9%. The cash selling price of the machinery is $1,050,000 and the cost of the machinery on Kurt's accounting records was $930,000. Prepare all of Kurts 2015 journal entries to this lease assuming that it is defined as a sales-type lease.
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