Question 4

Hughey Co. as lessee records a capital lease of machinery on January 1, 2014. The seven annual lease payments of $700,300 are made at the end of each year. The present value of the lease payments at 10% is $3,410,800. Hughey uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value). Prepare an amortization table for 2014 and 2015