The following relate to an operating lease agreement:
a. The lease term is 3 years, beginning January 1, 2018.
b. The leased asset cost the lessor $4,000,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets.
c. Annual lease payments at the beginning of each year were $685,000.
d. Direct costs incurred by the lessor to consummate the completed lease transaction were $12,000.
Required:
Prepare the appropriate journal entries for the lessor from the beginning of the lease through the end of the lease term. Round your answers to the nearest whole dollar amounts.

Question

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The Answer of The following relate to an operating lease agreement:
a. The lease term is 3 years, beginning January 1, 2018.
b. The leased asset cost the lessor $4,000,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets.
c. Annual lease payments at the beginning of each year were $685,000.
d. Direct costs incurred by the lessor to consummate the completed lease transaction were $12,000.
Required:
Prepare the appropriate journal entries for the lessor from the beginning of the lease through the end of the lease term. Round your answers to the nearest whole dollar amounts.

The Following Relate to an Operating Lease Agreement