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Montana Company signs a five-year capital lease with Elway Company for office equipment. The yearly lease payment is $20,000, and the interest rate is 8%.
1. Compute the current value of Montana's five-year lease payments.
2. Prepare the journal entry to record Montana's capital lease at its inception.
Legal Aspects There is no law relating to branch accounts but examination problems under this heading are frequently linked to either partnership or company account problems. Ans
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