Benjamin Co. as lessee records a finance lease of a machine on January 1, 2021. The nine annual lease payments of $925,000 are made at the beginning of each year. The present value of the lease payments at 7%, including the first payment, is $6,448,451. Hughey uses the effective-interest method of amortization and straight-line depreciation (no residual value). Prepare and present an amortization table that includes payments for 2021, 2022, and 2023

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 5RE: Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the...
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Benjamin Co. as lessee records a finance lease of a machine on January 1, 2021. The nine
annual lease payments of $925,000 are made at the beginning of each year. The present value
of the lease payments at 7%, including the first payment, is $6,448,451. Hughey uses the
effective-interest method of amortization and straight-line depreciation (no residual value).

Prepare and present an amortization table that includes payments for 2021, 2022, and
2023 (i.e., stop after presenting the numbers for the third payment).

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