Lansing West Leased Computer Hardware from Franklin Leasing on January

question 189

Essay

Lansing West leased computer hardware from Franklin Leasing on January 1, 2018. Franklin purchased the equipment from International Machines at a cost of $56,040.
$\begin{array}{ll}\text { Related Information: }\\\text { Lease term } & 2 \text { years ( } 8 \text { quarterly periods) } \\\text { Quarterly rental payments } & \$ 7,500 \text { at the beginning of each period } \\\text { Economic life of asset } & 2 \text { years }\\\text { Fair value of asset } & \$ 56,040 \\\text { Implicit interest rate } & 8 \% \\\text { (Also lessee's incremental borrowing rate) } &\end{array}$
-Required:
Prepare appropriate journal entries for Franklin Leasing from the beginning of the lease through January 1, 2019. Franklin's fiscal year ends December 31. Round your answers to the nearest whole dollar amounts.