Question

On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $12,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by Computerworld at a cost of $95,000 and were expected to have a useful life of Five years with no residual value. Both firms record amortization and depreciation semiannually. (FV of $1, PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the appropriate entries for both the lessee and the lessor from the beginning of the lease through the end of 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. (Round your intermediate calculations and final answers to the nearest whole dollar.)

Answer 1

Check explanation

Step-by-step explanation:

Amortization is an accounting technique or method that is used to from time to time lessen the book/record value of a loan or intangible asset over a particular period of time, while Depreciation is an accounting method or technique used for allocating the price of a physical or tangible asset over its useful life or its life expectancy.

The step by step explanation to the question can be seen in the attachment below.