Use the information for Lenovo from BE21 6 Assume the direct fi
Use the information for Lenovo from BE21-6. Assume the direct-financing lease was recorded at a present value of $150,000.
In BE21-6, Assume that Lenovo (CHN) leased equipment that was carried at a cost of $150,000 to Sharon Swander Company. The term of the lease is 6 years beginning January 1, 2011, with equal rental payments of $30,044 at the beginning of each year. All executory costs are paid by Swander directly to third parties. The fair value of the equipment at the inception of the lease is $150,000. The equipment has a useful life of 6 years with no residual value. The lease has an implicit interest rate of 8%, no bargain-purchase option, and no transfer of title.

Prepare Lenovo’s December 31, 2011, entry to record interest.

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