08 23337908 23337908 book value of lease payable on

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Unformatted text preview: value of lease payable on January 1 Interest expense recorded on December 31 Cash paid to lessor on December 31 Amortization of lease payable recorded on December 31 1,166,895.3 8 971,915.96 759,388.40 527,733.36 275,229.36 105,020.58 87,472.44 68,344.96 47,496.00 24,770.64 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00 194,979.42 212,527.56 231,655.04 252,504.00 275,229.36 S E-4 Depreciating and amortizing lease assets and liabilities Refer to your answer for S E-3. Provide the journal entries to record the depreciation of the lease asset and the amortization of the lease liability on December 31, 2011. ANSWER Depreciation of servers in 2011 (using the straight-line method): Depreciation expense (+E, –SE) 233,379.08 Servers (–A) Assets 233,379.08 = Liabilities + Servers –233,379.08 Stockholders’ Equity Depreciation expense (+E) –233,379.08 *It is fine if you credited accumulated depreciation rather than the servers. Page 5 of 21 END-OF-CHAPTER MATERIAL Amortization of the lease payable in 2011 (using the effective interest method): Interest expense (+E, –SE) 87,472.44 Lease payable (–L) 212,527....
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This homework help was uploaded on 03/27/2014 for the course ACCOUNTING 151 taught by Professor Chinn during the Spring '12 term at Lehigh University .

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