Question

On August 1, 2016, Alpha Company entered into a capital lease, and correctly recorded the leased asset, and related obligation at $50,000.  The annual interest rate implicit in the lease was 6%, and the first lease payment of $2,000 is due at the end of each month of the lease.  Use this information to prepare the General Journal entry (without explanation) for the August 31, 2016 monthly lease payment. If no entry is required then write "No Entry Required." (Round your answer to the nearest whole dollar.)

On January 2, 2016, Alpha Corporation procured new equipment with an issue of 5,000 shares of $4.00 par value common stock. The equipment had an MSRP of $65,000. Alpha's stock was trading on the open market for $9.75 per share on January 2nd. Use this information to prepare the General Journal entry (without explanation) for the January 2 entry.

Answer 1

Solution Date Credit accounts & explanation Debit 1750 13, 10 250 Lease Liability Interest payable [ 50000 X 68X1/12] cash ale [To record lease payment] 2000 02-Joh 16 46750 equipment (5000 shares XQ.75 per I share Common stock [5000 Share X 4 per 20000 Share 28750 paed on capital in excess of par- Common stock 5000 shares y 5.75 per share