Question

Culver Corporation owns equipment that cost $81,600 and has a useful life of 8 years with no salvage value. On January 1, 2020, Culver leases the equipment to Havaci Inc. for one year with one rental payment of $15,300 on January 1. Assuming Havaci (lessee) elects to use the short-term lease exception, prepare Havaci's 2020 journal entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Answer: Check attachment

Step-by-step explanation:

Check the attachment for the journal entry. Also, note that the Depreciation expense was calculated in the journal entry as:

= Cost of asset - Salvage value / Useful life of asset

= (81600 - 0) / 8

= $10200