Hughey Co. as lessee records a finance lease of machinery on January 1, 2025. The seven annual lease payments of $875,000 are made at the end of each year. The present value of the lease payments at 10% is $4,259,868. Hughey uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value).

(a)Prepare an amortization table for 2025 and 2026. (Round answers to 0 decimal places, e.g. 5,275.)

HUGHEY Co. Lease Amortization Schedule
Date		Annual Lease Receipt/Payment		Interest on Receivable/Liability		Reduction in Receivable/Liability		Lease Receivable/Liability
1/1/25								$enter a dollar amount
12/31/25		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		enter a dollar amount
12/31/26		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount

(b)

Prepare all of Hughey's journal entries for 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, e.g. 5,275.)

Account Titles and Explanation	Debit	Credit
enter an account title to record the lease	enter a debit amount	enter a credit amount
enter an account title to record the lease	enter a debit amount	enter a credit amount
(To record the lease)
enter an account title to record the first lease payment	enter a debit amount	enter a credit amount
enter an account title to record the first lease payment	enter a debit amount	enter a credit amount
enter an account title to record the first lease payment	enter a debit amount	enter a credit amount
(To record the first lease payment)
enter an account title to record depreciation	enter a debit amount	enter a credit amount
enter an account title to record depreciation	enter a debit amount	enter a credit amount
(To record depreciation)