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On January 1,2016,Calloway Company Leased a Machine to Zone Corporation

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On January 1,2016,Calloway Company leased a machine to Zone Corporation.The lease qualifies as a direct financing lease.Calloway paid $240,000 for the machine and is leasing it to Zone for $34,000 per year,an amount that will return 10% to Calloway.The present value of the minimum lease payments is $240,000.The lease payments are due each January 1,beginning in 2016.What is the appropriate interest entry on December 31,2016?
On January 1,2016,Calloway Company leased a machine to Zone Corporation.The lease qualifies as a direct financing lease.Calloway paid $240,000 for the machine and is leasing it to Zone for $34,000 per year,an amount that will return 10% to Calloway.The present value of the minimum lease payments is $240,000.The lease payments are due each January 1,beginning in 2016.What is the appropriate interest entry on December 31,2016?

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