Quiz Chapter 21 - (b) Prepare all of Hughey's journal...

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Quiz Chapter 21 Name: ____________________________________ Hughey Co. as lessee records a capital lease of machinery on January 1, 2011. The six annual lease payments of $280,000 are made at the beginning of each year. The present value of the lease payments at 9% is $1,369,102. Hughey uses the effective-interest method of amortization and straight line depreciation (no residual value). Instructions (Round to the nearest dollar.) (a) Prepare an amortization table (the note) for 2011 and 2012.
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Unformatted text preview: (b) Prepare all of Hughey's journal entries for 2011. (a) Date Lease 9% Interest Reduction in Lease liability Payment expense liability 1/1/2011 1369102 1/1/2011 280000 280000 1089102 1/1/2012 280000 98019 181981 907121 (b) Machinery 1,369,102 Cash 280,000 Lease note payable 1,089,102 Interest Expense 98,019 Interest Payable 98,019 Depreciation Expense 228,184 Accumulated Depreciation 228,184...
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This note was uploaded on 03/27/2012 for the course ACCT 3312 taught by Professor Staff during the Spring '08 term at Texas A&M University, Corpus Christi.

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