Question - Rick Kleckner Corporation recorded a capital lease at $250,250 on January 1, 2014. The interest rate is 14%. Kleckner Corporation made the first lease payment of $51,190 on January 1, 2014. The lease requires 7 annual payments. The equipment has a useful life of 7 years with no salvage value.
Assume that at December 31, 2014, Kleckner made an adjusting entry to accrue interest expense of $27,868 on the lease.
Prepare Kleckner's January 1, 2015, journal entry to record the second lease payment of $51,190.