Question: Use the information for Lai Corporation from BE2011. Assume that instead of costing Lai $175,000, the equipment was manufactured by Lai at a cost of

Use the information for Lai Corporation from BE20–11. Assume that instead of costing Lai $175,000, the equipment was manufactured by Lai at a cost of $137,500 and the equipment’s regular selling price is $175,000. Prepare Lai Corporation’s January 1, 2011 journal entries at the inception of the lease and the entry at December 31, 2011, to record interest.

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