Question

On January 2, 2019, Denny Corp. enters into five-year finance lease for machinery with annual year-end payments of $15,000. The present value of the six annual lease payments is $65,000. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

Answer 1

Instead of Right of use asset, machinery account can alternatively be used.

Date General Journal Debit Credit

Jan 2 Right of use asset $65,000

Lease Liability $65,000

(To record lease)