What journal entry would gold star make at january 2,2013


On January 2, 2013, Gold Star Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $80,000 each, payable beginning December 31, 2013. Brick Co. agrees to guarantee the $50,000 residual value of the asset at the end of the lease term. Brick's incremental borrowing rate is 10%, however it knows that Gold Star's implicit interest rate is 8%. What journal entry would Gold Star make at January 2,2013 assuming this is a direct-financing lease?
PV Annuity Due PV Ordinary Annuity PV Single Sum
8%, 5 periods 4.31213 3.99271 0.68508
10%, 5 periods 4.16986 3.79079 0.62092

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Accounting Basics: What journal entry would gold star make at january 2,2013
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