Question: On January 1, 2018, Dalton Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Dalton to make annual payments of $50,000 at the beginning of each year for five years with the equipment going back to the lessor at the end of this period. The equipment has an estimated useful life of 6 years and no salvage value. Dalton uses the straight-line method of depreciation for all of its fixed assets. Dalton accordingly accounts for this lease transaction as a capital lease. The minimum lease payments were determined to have a present value of $208, 493 at an effective interest rate of 10%
a. Prepare a lease amortization table for 2018 & 2019
b. Record the journal entries for 1/1/18, 12/31/18 & 1/1/19.