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On December 31, 2019, Ajax Inc. is the lessee in a lease contract with a...

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Accounting

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On December 31, 2019, Ajax Inc. is the lessee in a lease contract with a term of 5 years, minimum annual payment of $15,000, with the first payment due immediately, interest rate of 8%, and lease present value of $64,682. Comet Inc., the lessor of the lease, estimates that the leased asset has a useful life of 10 years and no salvage value. The asset was purchased for $120,000. Required: a. Calculate Ajax's amortization expense for the right-of-use asset in 2020; b. Prepare the journal entries that Comet records on Dec 31, 2019 and Dec 31, 2020

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