Zarlon Leasing Company agrees on January 1,2017 to rent Killington Winery the equipment that Killington requires to expand its production capacity to meet customers' demands for its products.The lease agreement calls for five annual lease payments of $11 0,000 at the end of each year.Killington has identified this as a finance lease.Furthermore,the company has determined that the present value of the lease payments,discounted at 4%,is $489,700.The leased equipment has an estimated useful life of five years and no residual value.Killington uses the straight-line method for depreciating similar equipment that it owns.
Required:
a.Prepare a lease amortization schedule for this lease.
b.Prepare the necessary journal entries for the first year of the lease.

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The Answer of Zarlon Leasing Company agrees on January 1,2017 to rent Killington Winery the equipment that Killington requires to expand its production capacity to meet customers' demands for its products.The lease agreement calls for five annual lease payments of $11 0,000 at the end of each year.Killington has identified this as a finance lease.Furthermore,the company has determined that the present value of the lease payments,discounted at 4%,is $489,700.The leased equipment has an estimated useful life of five years and no residual value.Killington uses the straight-line method for depreciating similar equipment that it owns.
Required:
a.Prepare a lease amortization schedule for this lease.
b.Prepare the necessary journal entries for the first year of the lease.

Zarlon Leasing Company Agrees on January 1,2017 to Rent Killington