Question

On January 1, 2021, 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 $19,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $109,000 and were expected to have a useful life of Five years with no residual value. Both firms record amortization and depreciation semiannually. (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.) Or Use Intermediate Accounting table if not provided.

Required:
Prepare the appropriate entries for both the lessee and the lessor from the beginning of the lease through the end of 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. (Round your intermediate calculations and final answers to the nearest whole dollar.)

  Required Journal entry:

1. Record the beginning of the lease for Nath-Langstrom Services. (January 1,2021)
2. Record the lease payment and interest expense for Nath-Langstrom Services. (June 30,2021)
3. Record the amortization expense for Nath-Langstrom Services. (June 30,2021)
4. Record the lease payment and interest expense for Nath-Langstrom Services. (December 31,2021)
5. Record the amortization expense for Nath-Langstrom Services. (December 31,2021)
6. Record the lease revenue received by ComputerWorld Leasing. (June 30,2021)
7. Record the Depreciation expense for ComputerWorld Leasing. (June 30,2021)
8. Record the lease revenue received by ComputerWorld Leasing. (December 31,2021)
9. Record the Depreciation expense for ComputerWorld Leasing. (December 31,2021)

Answer 1

Page 2 Nath-Langstoom services ince, a computer software training ficom, leased several computers under a two year operating lease agreement from computer world leasing, which routinely finances equipment for other firms at an annual interest of 4l. Following are the repoots of North Langstrom services of various leases, payments & interest from January 1t to December 31st 2021. Journal Entries in the books of Nath - Langstoom services, inc., Date Account title & explanation Debit Credit 1-Jan-21 Right of use asset $60,924.00 Lease payable $60,924.00 record lease asset Interest expense $1,218.48 30-Jan-21 Lease payable (BF) $14,781.52 Cash $16,000.00 becood lease payment 30-Jan-al Amortization expense $15,231.00 (60924/4) right of use asset $15,231.00 record amootization Expense

Рce- B1-Dec-2021 Interest expense. C$60924-14791-52 x 2.) $922.85 | Lease payable (BF) $15,677.15 $16,000.00 cash recood lease payment) $15,231.00 31-Dec-21 Amootization expense $15,231.00 right of use asset recood amootization expense

Page 3 leasing Journal Entries in the books of Computer would Date 30-Jan-21 Debit credit $16,000.00 $16,000.00 $17,000.00 Account title & explanation cash Lease revenue becord lease payment Depreciation expense ($102,000/6) Accumulated depreciation Recood Dep. Cash Lease revenue becood fease payment $17,000.00 31-Dec-21 $16,000.00 $16,000.00 |31-Dec-21 Depreciation expense. $102, 00018) accumulated depreciation becood depreciation $17,000.00 $ 17,000.00