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Find and Journalize the acquisition of the equipment

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Reference no: EM132751992

XYZ Construction Inc. acquired equipment under a capital lease that requires six annual lease payments of $22,500. The first payment is due when the lease begins on January 2, 2020. Future payments are due on January 2 of each year of the lease term. The interest rate in the lease is 9 percent and the present value of the five future lease payments is $87,517.

Problem 1: Journalize (a) the acquisition of the equipment, (b) the amortization for 2020, (c) the accrued interest at December 31, 2020, and (d) the second lease payment on January 2, 2021

Reference no: EM132751992

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