Homework Answers
Solution
Two adjusting entries are required one for interest and another for depreciation.
Now,
Following is the interest amount calculation => $187,600 - $36,702 =>$1, 50,898.
=>$1, 50,898x12% =>$18,107.76. (Rounded to nearest whole dollar)
Depreciation = (cost of asset - salvage value) / number of years
=> ($18,107.76 - $0) / 7
=>$2586.82.
|
December 31,2017 |
Interest expense |
18,107.76 |
|
|
Interest payable a/c |
$18,107.76 |
||
|
December 31,2017 |
Depreciation expense a/c |
$2,586.82 |
|
|
.To Accumulated depreciation - capital leases |
$2,586,82 |
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