Brief Exercise 21-4 Rick Kleckner Corporation recorded a capital lease at $219,3

Question

Brief Exercise 21-4

Rick Kleckner Corporation recorded a capital lease at $219,360 on January 1, 2014. The interest rate is 14%. Kleckner Corporation made the first lease payment of $49,483 on January 1, 2014. The lease requires 6 annual payments. The equipment has a useful life of 6 years with no salvage value.

Assume that at December 31, 2014, Kleckner made an adjusting entry to accrue interest expense of $23,783 on the lease.

Prepare Kleckner’s January 1, 2015, journal entry to record the second lease payment of $49,483. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 125.)

Date

Account Titles and Explanation

Debit

Credit

January 1, 2015

Date

Account Titles and Explanation

Debit

Credit

January 1, 2015

Explanation / Answer

Lease Liability A/c Dr. 25700

Intt Accrued A/c Dr. 23783

To Cash A/c 49,483

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