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2 Assume that Hogwarts Corporation leases a wand-making machine from Lightning Inc. on Dec 31, 2017. 2 The lease requires monthly payments of $500 for 2 years, with the first payment due of Jan 31, 2018. E The rate of interest applicable to the lease is 12% compounded monthly. Assume the lease meets the criteria for a capital lease. 1. Record the journal entry required on Dec 31, 2017.

2 Assume that Hogwarts Corporation leases a wand-making machine from Lightning Inc. on Dec 31, 2017. 2 The lease requires monthly payments of $500 for 2 years, with the first payment due of Jan 31, 2018. E The rate of interest applicable to the lease is 12% compounded monthly. Assume the lease meets the criteria for a capital lease. 1. Record the journal entry required on Dec 31, 2017.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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May you please help me solve these 3 questions? Thanks!
E Assume that Hogwarts Corporation leases a wand-making machine from Lightning Inc. on Dec 31, 2017. 2 The lease requires monthly payments of $500 for 2 years, with the first payment due of Jan 31, 2018. 2 The rate of interest applicable to the lease is 12% compounded monthly. 2 Assume the lease meets the criteria for a capital lease. 1. Record the journal entry required on Dec 31, 2017.
Transcribed Image Text:E Assume that Hogwarts Corporation leases a wand-making machine from Lightning Inc. on Dec 31, 2017. 2 The lease requires monthly payments of $500 for 2 years, with the first payment due of Jan 31, 2018. 2 The rate of interest applicable to the lease is 12% compounded monthly. 2 Assume the lease meets the criteria for a capital lease. 1. Record the journal entry required on Dec 31, 2017.
2. Create a schedule of the first 5 lease payments. Month Beginning Monthly Lease Liability payment Ending Lease Liability Interest Principal Expense 1 3 4 3. Record the journal entry on Jan 31, 2018 for the first payment 2.
Transcribed Image Text:2. Create a schedule of the first 5 lease payments. Month Beginning Monthly Lease Liability payment Ending Lease Liability Interest Principal Expense 1 3 4 3. Record the journal entry on Jan 31, 2018 for the first payment 2.
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