Hughey Co. as lessee records a capital lease of machinery on January 1, 2018. The seven annual lease payments of $875,000 are made at the end of each year. The present value of the lease payments at 10% is $4,260,000. Hughey uses the effective-interest method of amortization and Straight-line Depreciation over 7 years (no residual value). Instructions (Round to the nearest dollar.) (a) Prepare an amortization table for 2018 and 2019. (b) Prepare all of Hughey’s journal entries for 2018.
Hughey Co. as lessee records a capital lease of machinery on January 1, 2018. The seven annual lease payments of $875,000 are made at the end of each year. The present value of the lease payments at 10% is $4,260,000. Hughey uses the effective-interest method of amortization and Straight-line Depreciation over 7 years (no residual value). Instructions (Round to the nearest dollar.) (a) Prepare an amortization table for 2018 and 2019. (b) Prepare all of Hughey’s journal entries for 2018.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hughey Co. as lessee records a capital lease of machinery on January 1, 2018.
The seven annual lease payments of $875,000 are made at the end of each year.
The present value of the lease payments at 10% is $4,260,000.
Hughey uses the effective-interest method of amortization and Straight-line
Instructions (Round to the nearest dollar.)
(a) Prepare an amortization table for 2018 and 2019.
(b) Prepare all of Hughey’s
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