Assume that a town leases equipment on a capital lease. The present value of the leased equipment is $65,000. The city, subsequently, pays $6,500 on the lease, $3,900 of which is designated as interest and the remainder to a reduction of the lease obligation: Required: Prepare the journal entry to record the acquisition of equipment via lease and the subsequent payment.
Assume that a town leases equipment on a capital lease. The present value of the leased equipment is $65,000. The city, subsequently, pays $6,500 on the lease, $3,900 of which is designated as interest and the remainder to a reduction of the lease obligation: Required: Prepare the journal entry to record the acquisition of equipment via lease and the subsequent payment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume that a town leases equipment on a capital lease. The present value of the leased equipment is $65,000. The city, subsequently, pays $6,500 on the lease, $3,900 of which is designated as interest and the remainder to a reduction of the lease obligation:
Required: Prepare the journal entry to record the acquisition of equipment via lease and the subsequent payment.
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