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Staple Simmons: Journal Entry

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%.

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General Journal Debit Credit
Leased Equipment 143,724
Lease Obligation - current 57,273
Lease Obligation - ...

Solution Summary

A journal entry is prepared based on a 6 year lease and assumes an interest rate of 10%.