9. A Company leased equipment from B Leasing on January 1, 2021. B recently purchased the equipment at a cost of $248,320.
Other information:
Lease term 3 years
Payments $90,000 on January 1/2021,12/31/2021 and 12/31/2022
Life of asset 3 years
Fair value of asset $248,320
Implicit interest rate 9%
There is no expected residual value.
Required: (Show the computing process and precise journal entries)
A. Prepare the appropriate journal entries for B Leasing for 2021, 2022, and 2023 calendar year ends.
B. Prepare the appropriate journal entries for A Company for 2021, 2022, and 2023 calendar year ends.