Question - On January 1, 2015, a day when the available interest rate was 10%, North Point Printing Company leased equipment with an eight-year life (no salvage value expected) under a contract calling for five $6000 annual lease payments beginning January 1, 2016. The equipment will become the property of North Point at the end of that period. Prepare entries to record
(a) the leasing of the equipment;
(b) the year-end adjustment to recognize interest expense on the lease liability at December 31, 2015.
(c) depreciation expense for 2015; and
(d) the January 1, 2016 payment under the lease.