Question

Briarwood Company enters into a lease for the use of a new piece of equipment. The term of the lease is 3 years, and Briarwood estimates the economic life of the equipment to be 4 years. The present value of the lease payments is $58,000. The lease is considered a finance lease. The journal entry to record the initial transaction will include a

Answer 1

Dr. Right of use asset $58,000; Cr. Lease liability $58,000

Step-by-step explanation:

Journal entry

Date General Journal Debit Credit

Right of use of asset $58,000

Lease Liability $58,000

(Entry to record the initial transaction)