On January 1, MMD Company entered into a lease for equipment rental. The company agreed to pay

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On January 1, MMD Company entered into a lease for equipment rental. The company agreed to pay $4,500 per year for 10 years. The present value of all 10 lease payments is $27,651. Assuming the company classified the lease as an operating lease, make the necessary journal entry to record the payment of the first year’s rent expense for the equipment. The first lease payment is made at the end of the year.

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Accounting concepts and applications

ISBN: 978-0538745482

11th Edition

Authors: Albrecht Stice, Stice Swain

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