Question

please answer it with all details, from where you got the numbers and answer exactly I need the calculate


Windom Co. as lessee records a capital lease of machinery on January 1, 2017. The seven annual lease payments of $350,000 are made at the end of each year. The present value of the lease payments at 10% is $1,704,000. Windom uses the effective-interest method of amortization and straight- line depreciation (no residual value).

instructions( Round to the nearest dollar.)

(b)Prepare all of Windom 's journal entries for 2017

Answer 1

a)

LEASE AMORTIZATION TABLE
Date	Annual lease	Interest 10%	Reduction of	Lease Liability
	payment		Lease Liability
1/1/2017				$1,704,000
1/1/2017	$350,000	$170,400	$179,600	$1,524,400
1/1/2018	$350,000	$152,440	$197,560	$1,326,840

B)

Leased machinery	$1,704,000
Lease liability		$1,704,000
(To record the lease)
Intrest expense	$170,400
Lease liability	$179,600
Cash		$350,000
(To record first lease payment)
Depreciation expense (7/28*1,704,000)	$426,000
Accumulated depreciation		$426,000
(To record depreciation)