Problem 3 – Leases Part I: Capital lease amortization and journal entries Hughey Co. as lessee records a finance 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 (no residual value). Instructions (Round to the nearest dollar.) – Required in Excel Format (a) Prepare an amortization table for 2018 and 2019. (b) Prepare all of Hughey’s journal entries for 2018 and 2019. Part II: Operating lease amortization and journal entries Hughey Co. as lessee records an operating 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 (no residual value). Note: The data is the same as Part I, but consider it as an operating lease. Instructions (Round to the nearest dollar.) - Required in Excel Format (a) Prepare an amortization table for 2018 and 2019. (b) Prepare all of Hughey’s journal entries for 2018 and 2019.
Problem 3 – Leases
Part I: Capital lease amortization and
Hughey Co. as lessee records a finance 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.) – Required in Excel Format
(a) Prepare an amortization table for 2018 and 2019.
(b) Prepare all of Hughey’s journal entries for 2018 and 2019.
Part II: Operating lease amortization and journal entries
Hughey Co. as lessee records an operating 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 (no residual value).
Note: The data is the same as Part I, but consider it as an operating lease.
Instructions (Round to the nearest dollar.) - Required in Excel Format
(a) Prepare an amortization table for 2018 and 2019.
(b) Prepare all of Hughey’s journal entries for 2018 and 2019.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
