The Barton Leasing Company recently purchased printing equipment for $185,296 and wants to lease it to Triple J News Service.If Triple J accepts,it will sign the lease agreement on December 1,2010.The equipment has a useful life of 5 years,and the lease term is for five years.During the year Triple J is responsible for all repairs and maintenance of the leased property.The lease agreement calls for Triple J to make five annual lease payments of $43,705 starting December 1,2010.The interest rate is 9 percent.Triple J has asked you to help it plan for the impact of the lease.
Required:
(A.)What make this a capital lease?
(B.)What is the value of the equipment and the amount of the liability generated by the transaction?
(C.)Prepare a lease payment schedule for the first three lease payments.
(D.)What is the interest cost in each of the first two years of the lease's life?
(E.)How is the lease reported on December 31,2010 on the balance sheet?

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The Answer of The Barton Leasing Company recently purchased printing equipment for $185,296 and wants to lease it to Triple J News Service.If Triple J accepts,it will sign the lease agreement on December 1,2010.The equipment has a useful life of 5 years,and the lease term is for five years.During the year Triple J is responsible for all repairs and maintenance of the leased property.The lease agreement calls for Triple J to make five annual lease payments of $43,705 starting December 1,2010.The interest rate is 9 percent.Triple J has asked you to help it plan for the impact of the lease.
Required:
(A.)What make this a capital lease?
(B.)What is the value of the equipment and the amount of the liability generated by the transaction?
(C.)Prepare a lease payment schedule for the first three lease payments.
(D.)What is the interest cost in each of the first two years of the lease's life?
(E.)How is the lease reported on December 31,2010 on the balance sheet?

The Barton Leasing Company Recently Purchased Printing Equipment for $185,296