Lance Corporation, a Public Corporation, Entered into the Following Transactions

question 21

Essay

Lance Corporation, a public corporation, entered into the following transactions:
1. On January 1, 2021, Gagne Car Rental leased a car to Lance Corporation for one year. Terms of the operating lease call for monthly payments of $ 550.
2. On January 1, 2021, Lance Corporation entered into an agreement to lease 20 machines with a fair market value of $ 160,000 from Wells Corporation. The terms of the lease agreement require an initial payment of $ 50,000 and then three annual rental payments of $ 60,000 beginning on December 31, 2021. The present value of the three rental payments is $ 149,211.
Instructions
a) Identify each lease as either operating or finance.
b) Prepare the appropriate journal entries to be made by Lance Corporation on January 1 related to the lease transactions.

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Definitions:

Authoritarian Parents

Parents who enforce strict discipline and high expectations through a regulatory and controlling approach.

Rules

Prescribed guidelines or directives intended to regulate behavior or processes in various contexts, such as in games, societies, or organizations.

Responsive

Being quick to react or respond positively or effectively to some form of input or stimulation, such as a question, request, or change in environment.

Higher-income Families

Families with financial earnings substantially above the average, often associated with greater access to resources, education, and health care.