Accounting for Leases On July 1, 2020, Shroff Company leased a warehouse building under a 10-year lease agreement. The lease requires quarterly lease payments of $7,500. The first lease payment is due on September 30, 2020. The lease was reported as a finance lease using an 8% annual interest rate. Required:
a. Prepare the journal entry to record the commencement of the lease on July 1, 2020.
b. Prepare the journal entries that would be necessary on September 30 and December 31, 2020.
c. Post the entries from parts a and b in their appropriate T-accounts.
d. Prepare a financial statement effects template to show the effects template to show the effects of the entries from parts a and b on the balance sheet and income statement.