Response to the following :
Capital Lease Payments
Refer to the data in problem. The interest included in the first lease payment is $2,765. Make the necessary journal entry(ies) to record the first $4,500 lease payment at the end of the first year.
Problem:
Capital Lease Acquisition
On January 1, XYZ Company entered into a lease for equipment rental. The company agreed to pay $4,500 per year for ten years. The present value of all ten lease payments is $27,651. Assuming the company classified the lease as a capital lease, make the necessary journal entry(ies) to record the acquisition of the equipment. The first lease payment is made at the end of the year.