What are the journal entries to record the lease payment

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Question - Jasper Ltd enters into a non-cancellable lease agreement with Kevin Ltd to lease some machinery under the following conditions on 1 July 2018:

Duration 9 years

Life of Leased Asset 11 years

Unguaranteed Residual $6 000

Lease Payment $7 000 at inception of lease

Lease Payments in arrears $5 000 per year (9 payments)

The interest rate implicit in the lease is 10%.

Required - What are the journal entries to record the lease payment at the inception of the lease and to record the first lease payment in the books of the lessee?

Reference no: EM132628532

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