Using an 6 percent interest rate, the present value of the lease payments is $1,950,423. The first payment of $250,000 is due when the lease begins, January 5, 2021. An additional payment is due on January 5th for each of the next 9 years. Prepare journal entries to record the following: 1. The lease of the equipment on January 5, 2021. 2. The first lease payment on January 5, 2021. 3. Amortization expense for fiscal year ending December 31, 2021. 4. The second lease payment on January 5, 2022. If an entry affects more than one debit or credit account, enter the accounts in order of magnitude (largest to smallest balances), debits first. Round any calculations to the nearest dollar.
Using an 6 percent interest rate, the present value of the lease payments is $1,950,423. The first payment of $250,000 is due when the lease begins, January 5, 2021. An additional payment is due on January 5th for each of the next 9 years. Prepare journal entries to record the following: 1. The lease of the equipment on January 5, 2021. 2. The first lease payment on January 5, 2021. 3. Amortization expense for fiscal year ending December 31, 2021. 4. The second lease payment on January 5, 2022. If an entry affects more than one debit or credit account, enter the accounts in order of magnitude (largest to smallest balances), debits first. Round any calculations to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Using an 6 percent interest rate, the present value of the lease payments is $1,950,423.
The first payment of $250,000 is due when the lease begins, January 5, 2021.
An additional payment is due on January 5th for each of the next 9 years.
Prepare
1. The lease of the equipment on January 5, 2021.
2. The first lease payment on January 5, 2021.
3. Amortization expense for fiscal year ending December 31, 2021.
4. The second lease payment on January 5, 2022.
If an entry affects more than one debit or credit account, enter the accounts in order of
magnitude (largest to smallest balances), debits first.
Round any calculations to the nearest dollar.
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