On July 1, City Hospital leased equipment from MedTech Instruments for a period of five years.
The lease calls for monthly payments of $2,000, payable in advance on the first day of each month,
beginning July 1.. Prepare the journal entry needed to record this lease in the accounting records of
City Hospital on July 1 under each of the following independent assumptions
(a) The lease represents a simple rental arrangement.
(b) At the end of five years, title to this equipment will be transferred to City Hospital at no additional
cost. The present value of the 60 monthly lease payments is $90,809, of which $2,000 is paid in cash
on July 1.
Extracted text: Q3: On July 1, City Hospital leased equipment from MedTech Instruments for a period of five years. The lease calls for monthly payments of $2,000, payable in advance on the first day of each month, beginning July 1.. Prepare the journal entry needed to record this lease in the accounting records of City Hospital on July 1 under each of the following independent assumptions (a) The lease represents a simple rental arrangement. (b) At the end of five years, title to this equipment will be transferred to City Hospital at no additional cost. The present value of the 60 monthly lease payments is $90,809, of which $2,000 is paid in cash on July 1.