Deal Leasing Leased Equipment to Hand Company on January 1

Essay

Deal Leasing leased equipment to Hand Company on January 1, 2018. The lease payments were calculated to provide the lessor a 10% return. Ten annual lease payments of $60,000 are due at the beginning of each year beginning January 1, 2018. The present value of an annuity due of $1 at 10% for ten periods is 6.75902.
-Required:
Consider this to be an operating lease. Round your answers to the nearest whole dollar amounts.
1. Prepare the journal entries to record the lease by Hand (lessee) at January 1, 2018.
2. Prepare the journal entries to record the lease by Hand (lessee) at December 31, 2018, the end of the first reporting period.