<u>Solution and Explanation:</u>
Date General Journal Debit Credit
January 1, 2017 Cash/Liquidity Finance Co. 680000
Computer system 600000
Profit on sale of computer system 80000
To record the sale of computer systems
January 1, 2017 Lease Rental 115970
Cash 115970
To record the first lease rental of the lease Journal entries in the books of lesser(Liquidity Finance Co.)
Amount in $
Date General Journal Debit Credit
January 1, 2017 Computer system 680000
Cash/Elmer's Restaurants 680000
To record the purchase of computer systems
January 1, 2017 Cash 115970
Lease Rental Income 115970
To record the first receipt towards lease rental of the lease
December 31, 2017 Depreication on computer system 68000
Accumulated depreication on computer system 68000
To record the depreication expense for the year
