Journal entry to record the lease

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The Biltmore Company leased new equipment on December 31, 2010. The lease agreement transfers the ownership of the equipment to the Biltmore Company at the end of the lease. The present value of the lease payments are $192,000. After recording the lease, the Company has assets of $1,800,000, liabilities of $1,100,000 and stockholder's equity of $700,000. (a) prepare the journal entry to record the lease, and (b) compute the and comment on the debt to total assets ratio at the year-end.

Reference no: EM13127344

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