On January 1, 2018, QuickStream Communications leased telephone equipment from D
ID: 2537626 • Letter: O
Question
On January 1, 2018, QuickStream Communications leased telephone equipment from Diglum, Inc. Diglum's cash selling price for the equipment is $1,742104. The lease agreement specifles six annual payments of $400,000 beginning December 31, 2018, and at each December 31 thereafter through 2023. The six-year lease is equal to the estimated useful life of the equipment. The contract specifies that lease payments for each year will increase by the higher of (a) the increase in the Consumer Price Index for the preceding year and (b) 3 percent. The CPI at the beginning of the lease is 130. Digium routinely leases equipment to other firms. The interest rate in these lease arrangements is 10%. Forst Pyorst AAof $1, PVA of S1. EVAD of S1 and PVADof $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the appropriate journal entries for QuickStream to record the lease at its beginning date of January 1, 2018 (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet Record the beginning of the lease for QuickStream Communications Note: Enter debits before credits Date General Journal DobitCredit January 01 2018Explanation / Answer
Apprpriate journal entries for Quickstream to record the lease at the begining of the of January 1, 2018
Date Particulars Debit Credit Jan 1, 2018 Lease Asset $1,742,104 Lease Liability $1,742,104 (Lease recognised at the inception)