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Chance enterprises leased equipment from third bank

03/05/2021 Client: muhammad11 Deadline: 2 Day

Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Chance purchased the equipment at a cost of $1,000,000. Chance elected the short-term lease option. Appropriate adjusting entries are made annually.
Related Information:
Lease term ................................................ 1 year (4 quarterly periods)
Quarterly lease payments ..... $40,000 at Jan. 1, 2018, and at Mar. 31, June 30,
............................................................................... and Sept. 30
Economic life of asset ......................................................... 5 years
Interest rate charged by the lessor ................................................ 8%
Required:
Prepare appropriate entries for Chance from the beginning of the lease through December 31, 2018?

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