Brief Exercise 21-3 a. me e se equi es annual payments The Hea and Corporation r

Question

Brief Exercise 21-3 a. me e se equi es annual payments The Hea and Corporation recorded a capital ease at $3 12.900 onJanuary 1 2017. The interest ate is 10% Head and Corporation made the st lease payment of S 8 429 on an ary 1 equipment has a useful life of 7 years with no salvage value. Prepare Headland Corporation's December 31, 2017, adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to O decimal places e.g. 125.) Date Account Titles and Explanation Debit Credit December 31, 2017 (To reccrd interest expense.) December 31, 2017 To reccrd depreciation.)

Explanation / Answer

Date Account titles and explanation Debit Credit Dec. 31 Interest Expense[($312,900 - $58,429) x 10%] $25,447 Interest Payable $25,447 Dec. 31 Depreciation Expense($312,900 / 7) $44,700 Accumulated Depreciation—Capital Leases $44,700

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