On January 1, 2016, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers from ComputerWorld Corporation under a two-year operating lease agreement. The contract calls for four rent payments of $12,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $95,000 and were expected to have a useful life of five years with no residual value.

Required:

Prepare the appropriate entries for the lessee (Use straight-line depreciation.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Part 1:

Record the lease payment for June 30, 2016.

Part 2:

Record the lease payment for December 31, 2016.

Prepare the appropriate entries for the lessor from the inception of the lease through the end of 2016. (Use straight-line depreciation.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Part 1:

Record cash received.

Part 2:

Record cash received.

Part 3:

Record depreciation expense.