On January 1 2018 NathLangstrom Services Inc a computer soft

On January 1, 2018, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $18,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $107,000 and were expected to have a useful life of Five years with no residual value. Both firms record amortization and depreciation semi-annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required Prepare the appropriate entries for both the lessee and the lessor from the beginning of the lease through the end of 2018. (If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field. Round your intermediate calculations to the nearest whole dollar amount.)

Solution

a) Nath-Langstrom Services

June 30, 2018

Rent expense$18,500

Cash$18,500

December 31, 2018

Rent expense$18,500

Cash$18.500

b) ComputerWorld Corp

June 30, 2016

Cash$18,500

Rent Revenue$18,500

December 31, 201

Cash$18,500

Rent Revenue$18,500

Depreciation exp ($107,000 / 5 years)$21,400

Accumulated Depreciation$21,400