Necessary journal entries to record the transactions

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On January 2, 2011, the Wilcox Studios leased six computers for use in the engineering department. The lease period is for 13 years and the estimated economic life of the leased property is 15 years. The lease does not contain automatic title transfer or a bargain purchase option. Lease payments are $9,000 per year, payable each December 31. The incremental borrowing rate for Wilcox is 12 percent and the implicit interest rate (known by Wilcox) is 10 percent. The company uses straight-line depreciation for this type of equipment.

Provide the necessary journal entries to record the transactions for Wilcox for the period January 2, 2011 through December 31, 2012.

Reference no: EM13137115

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