On January 1,2017,Rushabh Company entered a lease to rent office space.The lease requires Rushabh to pay $190,000 per year,at the end of each year,for 10 years.The lease is non-cancellable and non-renewable.The building's estimated useful life is 30 years,and its current fair value is estimated to be $6 million.Rushabh's incremental borrowing rate is 9%.
Required:
Classify this lease for Rushabh Company and record the journal entries for the first year of the lease.

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The Answer of On January 1,2017,Rushabh Company entered a lease to rent office space.The lease requires Rushabh to pay $190,000 per year,at the end of each year,for 10 years.The lease is non-cancellable and non-renewable.The building's estimated useful life is 30 years,and its current fair value is estimated to be $6 million.Rushabh's incremental borrowing rate is 9%.
Required:
Classify this lease for Rushabh Company and record the journal entries for the first year of the lease.

On January 1,2017,Rushabh Company Entered a Lease to Rent Office