The Home Depot is the leading retailer in the home improvement industry and one of the 10largest

Question:

The Home Depot is the leading retailer in the home improvement industry and one of the 10 largest retailers in the United States. The company included the following on its January 29, 2012, and footnotes ($ in millions):
Capital lease assets ............. $588
Capital lease obligations (long term) ...... $420
Capital lease obligations (current) ....... 29
Total capital lease obligations .......... $449
Total capital lease payments, scheduled for the fiscal year ending in 2013, are $106,000,000.
1. Prepare the journal entry for the $106,000,000 lease payments. Remember that the lease payments will include the principal payments due for the year plus interest expense accrued for the year.
2. Suppose that the capital lease assets have an average remaining life of 20 years and that no new leases are signed in the fiscal year ending in 2013. Compute the balance in the capital lease asset account and the total in the capital lease obligations account (long-term and current combined) as of the year ending in 2013.
3. Explain why the amount in the capital lease assets account is not equal to the amount in the lease obligations accounts.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...