Acc422 Intermediate Accounting: BE21-9 Indiana Jones Corporation enters into a 6-year lease

Acc422 Intermediate Accounting
BE21-9
Indiana Jones Corporation enters into a 6-year lease of equipment on January 1, 2011, which requires 6 annual payments of $40,000 each, beginning January 1, 2011. In addition, Indiana Jones guarantees the lessor a residual value of $20,000 at lease-end. The equipment has a useful life of 6 years.

Prepare Indiana Jones' January 1, 2011, journal entries assuming an interest rate of 10%. (Round your answer to the nearest dollar eg 58,591).
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