On January 1,Haymark Corporation signs a six-year lease for a truck that is accounted for as a finance lease.The lease requires six $15,252 lease payments (the first at the beginning of the lease and the rest at December 31 of years 1 through 5).The present value of the six annual lease payments,at 6% interest,is $79,500.The lease payment schedule follows.
(a)Prepare the January 1 journal entry at the start of the lease to record any asset or liability.
(b)Prepare the January 1 journal entry to record the first $15,252 cash lease payment.
(b)Prepare the journal entry to record the cash lease payment at the end of Year 1 and the end of Year 2.
(c)Prepare the journal entry made at the end of each year to record straight-line amortization,assuming zero salvage value at the end of the six-year lease term.

Question

On January 1,Haymark Corporation signs a six-year lease for a truck that is accounted for as a finance lease.The lease requires six $15,252 lease payments (the first at the beginning of the lease and the rest at December 31 of years 1 through 5).The present value of the six annual lease payments,at 6% interest,is $79,500.The lease payment schedule follows.
  (a)Prepare the January 1 journal entry at the start of the lease to record any asset or liability.
(b)Prepare the January 1 journal entry to record the first $15,252 cash lease payment.
(b)Prepare the journal entry to record the cash lease payment at the end of Year 1 and the end of Year 2.
(c)Prepare the journal entry made at the end of each year to record straight-line amortization,assuming zero salvage value at the end of the six-year lease term.

Quizplus · Accepted Answer

The Answer of On January 1,Haymark Corporation signs a six-year lease for a truck that is accounted for as a finance lease.The lease requires six $15,252 lease payments (the first at the beginning of the lease and the rest at December 31 of years 1 through 5).The present value of the six annual lease payments,at 6% interest,is $79,500.The lease payment schedule follows.
  (a)Prepare the January 1 journal entry at the start of the lease to record any asset or liability.
(b)Prepare the January 1 journal entry to record the first $15,252 cash lease payment.
(b)Prepare the journal entry to record the cash lease payment at the end of Year 1 and the end of Year 2.
(c)Prepare the journal entry made at the end of each year to record straight-line amortization,assuming zero salvage value at the end of the six-year lease term.

On January 1,Haymark Corporation Signs a Six-Year Lease for a Truck