Question: Use the information for McCormick Ltd. from BE20.8. Assume that at December 31, 2020, McCormick made an adjusting entry to accrue interest expense of $8,296

Use the information for McCormick Ltd. from BE20.8. Assume that at December 31, 2020, McCormick made an adjusting entry to accrue interest expense of $8,296 on the lease. Prepare McCormick’s May 1, 2021 journal entry to record the second lease payment of $25,561. Assume that no reversing entries are made. Round amounts to the nearest dollar.

Data From BE20.8.

McCormick Ltd., a public company following IFRS 16, recorded a right-of-use asset and lease liability at $150,000 on May 1, 2020. The interest rate is 10%. McCormick made the first lease payment of $25,561 on May 1, 2020. The lease requires a total of eight annual payments. The equipment has a useful life of eight years with no residual value. Prepare McCormick’s December 31, 2020 adjusting entries. Round amounts to the nearest dollar.

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