We-Lease-All,Inc.leased a chroming machine to Fernando's Choppers.The lease qualifies as a direct financing lease and requires lease payments of $74,502 per year,payable in advance,over a ten-year period.There is no expected residual value.The fair market value of the packing machine is $430,000--the same amount paid by Choppers to purchase the asset.The lease term begins on January 1,2014.
Provide the journal entries required on Choppers' books to
(1)record the lease transaction and the first lease payment.
(2)recognize interest revenue at the end of the first year.Washington uses a calendar-year accounting period.(Round all computations to the nearest dollar.)

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The Answer of We-Lease-All,Inc.leased a chroming machine to Fernando's Choppers.The lease qualifies as a direct financing lease and requires lease payments of $74,502 per year,payable in advance,over a ten-year period.There is no expected residual value.The fair market value of the packing machine is $430,000--the same amount paid by Choppers to purchase the asset.The lease term begins on January 1,2014.
Provide the journal entries required on Choppers' books to
(1)record the lease transaction and the first lease payment.
(2)recognize interest revenue at the end of the first year.Washington uses a calendar-year accounting period.(Round all computations to the nearest dollar.)