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Prepare appropriate journal entries recorded

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Question - On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $15,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $101,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually.

Required -

1. Prepare appropriate Journal entries recorded by Nath-Langstrom Services for the first year of the lease.

2. Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease.

Reference no: EM133126124

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