On January 1, 2021, Steve Company leased a building under a three-year operating lease. The annual rental payments are $272,000 on January 1, 2021, the inception of the lease, and $200,000 on January 1 of 2022 and 2023. Steve made structural modifications to the building costing $360,000 before occupying the building. The useful life of the building and the modifications is 30 years with no expected residual value. Required: Prepare the appropriate journal entries for Steve Company for 2021. Steve's fiscal year is the calendar year, and the company uses straight-line depreciation. (Hint: 8 total Debits and Credits)

Answer rating: 100% (QA)

The journal entry for Steve company for 2021 will be For lessee Dr Rent expense 272000 Cr Cash 2720... View the full answer