On January 1, 2011, Irwin Animation
sold a truck to Peete Finance for $33,000 and immediately leased it
back. The truck was carried on Irwin books at $28,000. The term of
the lease is 5 years, and title transfers to Irwin at lease-end. The
lease requires five equal rental payments of $8,705 at the end of each
year. The appropriate rate of interest is 10%, and the truck has a
useful life of 5 years with no salvage value. Prepare Irwin 2011
journal entries.
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