Leased six computers , journal entries?

On January 2, 2005, the Wilcox Studios leased six computers for use in the engineering department. The lease period is for 13 years and the estimated economic life of the leased property is 15 years. The lease does not contain automatic title transfer or a bargain purchase option. Lease payments are $9,000 per year, payable each December 31. The incremental borrowing rate for Wilcox is 12 percent and the implicit interest rate (known by Wilcox) is 10 percent. The company uses straight-line depreciation for this type of equipment.

Provide the necessary journal entries to record the transactions for Wilcox for the period January 2, 2005 through December 31, 2006.

Leased six computers , journal entries?vincent

Wilcox studios is doomed. After 2009 or 2010 their technology will be hideously outdated and the competition will devour them. There isn't a computer around that has a 15 year useful life. So, they're trapped into paying $9000 per year for 13 years or $117,000 for these six computers. Short of a Cray, I can't imagine that 6 computers could cost $117,000 and last for 13 (or 15 years).

Just another example of a bad homework problem (no real world basis). Anyway, the renting in renting and real estate is real estate renting. The appropriate category for this question was undeniably the Homework section.

good luck!

Leased six computers , journal entries?adware remover

Why is this in the renting %26 real estate section? If you don't even know enough about your homework to know that it has nothing to do with real estate, then you should probably spend your time reading your book instead of being on Yahoo! answers.

Here is a hint - this is an operating lease...so look up in your book the entries for an operating lease.
How much rent are you charging for them to live there?