On 1/1/21, Hall Inc entered into a lease agreement with Oates Co. Hall leased a...
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On 1/1/21, Hall Inc entered into a lease agreement with Oates Co. Hall leased a machine from Oates for 9 years. The estimated useful life of the machine is 9 years. At the end of the 9 year lease term, ownership of the machine will transfer back to Oates. The lease agreement calls for annual payments of $150,000, to begin on 1/1/21. The borrowing rate is 10%. The present value of the lease payments is $949,500. Show all computations.
- Prepare a lease amortization table for 1/1/21, 1/1/22 & 1/1/23.
- Prepare journal entries for Hall (lessee finance lease) for 1/1/21, 12/31/21, 1/1/22, 12/31/22 & 1/1/23.
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