Staple Simmons Corp enters into a 6 year lease equipment on 1/2/2008, which requires 6 annual payments of $30K each, beginning 1/2/2008. In addition, Staple Simmons Corp guaranteed the lessor a residual value of $20k at lease-end. The equipment has a useful life of 6 years. Prepare the Staple Simmons 1/2/2008 journal entry assuming an interest rate of 10%.
General Journal Debit Credit
Leased Equipment 143,724
Lease Obligation - current 57,273
Lease Obligation - ...
A journal entry is prepared based on a 6 year lease and assumes an interest rate of 10%.