ABC Company signed a 3 year lease with annual lease payments of 60,000. The annual lease payment
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Question:
ABC Company signed a 3 year lease with annual lease payments of 60,000. The annual lease payment includes $10,000 for insurance and are paid at the beginning of the year. The lease starts January 1st 2016. The lessor's implicit interest rate is 2% and the lessee's incremental borrowing rate is 3%.
Provide the journal entries for
1. The initial lease liability?
2. Lease payments and expense for each year of the 3 years?
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