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On January 1, 2017, Carla Corporation signed a 3-year noncancelable lease for several computers. The terms of the lease called for Carla to make annual payments of $4,100 at the beginning of each year, starting January 1, 2017. The computers have an estimated useful life of 3 years and a $560 unguaranteed residual value. The computers revert back to the lessor at the end of the lease term. Carla uses the straight-line method of depreciation for all of its property, plant, and equipment. Carla's incremental borrowing rate is 12%, and the lessor's implicit rate is unknown.
Question 1: Prepare all necessary journal entries for Carla for this lease through January 1, 20 18. (Credit account titles are automatically indented when amount is entered.)
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