Post Co as a lessee records a finance lease of machinery on 1/1/19. The 7 annual lease payments of $210,000 are paid at the end of each year. The present value of the lease payments at 10% is $1,022,400. Prepare a lease amortization schedule from 1/1/19 to 12/31/20. Prepare the journal entries from 1/1/19 to 12/31/20.

PostCo.

a. Lease Amortization Schedule

Period           PV                  PMT                 Interest                  FV

1/1/19                                                                                    $1,022,400

12/31/19    $1,022,400      $210,000.00    $102,240           $914,640

12/31/20      $914,640      $210,000.00      $91,464            $796,104

b. Journal Entries:

January 1, 2019:

Debit Right of Use Asset $1,022,400

Credit Lease Liability $1,022,400

To record the right of use asset and the lease liability.

December 31, 2019:

Debit Interest on Lease $102,240

Credit Lease Liability $102,240

To record the interest expense for the year.

Debit Lease Liability $210,000

Credit Cash $210,000

To record the payment of lease liability and interest.

December 31, 2020:

Debit Interest on Lease $91,464

Credit Lease Liability $91,464

To record the interest expense for the year.

Debit Lease Liability $210,000

Credit Cash $210,000

To record the payment of lease liability and interest.

Explanation:

a) Data and Calculations:

Annual lease payments = $210,000

Present value of the lease payments = $1,022,400

Interest rate = 10%

Lease period = 7 years

December 31, 2019:

Interest on lease = $102,240 ($1,022,400 * 10%)

Lease liability = $914,640 ($1,022,400 + $102,240 - $210,000)

December 31, 2020:

Interest on lease = $91,464 ($914,640 * 10%)

Lease liability = $796,104 ($914,640 + $91,464 - $210,000)

a) the medical information

since 1913, the medical knowledge has vastly changed.   medical terms that are today common-knowledge (dna, chemotherapy, etc.) were not even in existence in 1913.

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