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On January 1, 2018, Hester Co. sells equipment to Beck Corp. at its fair value of...

On January 1, 2018, Hester Co. sells equipment to Beck Corp. at its fair value of $720,300 and leases it back. The equipment had a carrying value of $632,500, the lease is for 10 years and the implicit rate is 10%. The lease payments of $106,800 start on January 1, 2018. Hester uses straight-line depreciation and there is no residual value.

Prepare all of Hester's entries for 2018.

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