ABC has the following lease information for some equipment -
Date of Lease January 1, 2014
Annual Lease Payments: $275,000 on December 31 for 5 years
Interest Rate 5%
Method Of Depreciation Straight-Line, no residual value
The lease is considered to be a capital lease.
1) Prepare the journal entries for 2014.
2) List the accounts and amounts that would appear on the balance sheet concerning this transaction as of December 31, 2015.
3) List the accounts and amounts that would appear on the income statement for the year ending December 31, 2016.