ABC Company leases a computer for 4 years for $1,200 per year. The present value of...
ABC Company leases a computer for 4 years for $1,200 per year. The present value of the payments is $4,200, based on a monthly interest rate of .003.
How much should ABC record as lease expense in the first month? Show and label all computations. Round to dollars and cents.
Homework Answers
| Account titles | Debit | Credit | |
| Interest expense | $12.60 | (4200*0.003) | |
| Lease payable | $87.40 | ||
| Cash | $100.00 | (1200/12) | |
| (entry for lease for the first month) | |||
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