Prepare the lease-related entries c should make on

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Problem 1: On 01-01-19, C leased a machine with a useful life of 5 years. The noncancelable lease agreement required C to make 4 annual lease payments of $25,000 starting 12-31-19. After making the last lease payment, C will retain the machine. C's borrowing rate on 01-01-19 was 4%. C uses a straight-line depreciation method (no residual value) and only prepares AJEs every December 31. Determine if this is a short-term or a long-term lease. If it is a long-term lease, determine if it is a long-term finance lease or a long-term operating lease. Prepare the lease-related entries C should make on:

a) 01-01-19
b) 12-31-19
c) 12-31-20
d) 12-31-21
e) 12-31-22
f) 12-31-23

 

Reference no: EM132727911

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