Question: What is the answer to this question, Please. Short Problem. Hughey Co. as lessee records a five-year lease of machinery with guaranteed residual value on

What is the answer to this question, Please.

What is the answer to this question, Please. Short Problem. Hughey Co.

Short Problem. Hughey Co. as lessee records a five-year lease of machinery with guaranteed residual value on January 1, 2011. The annual lease payments of $400,000 are made at the end of each year. The present value factor for an ordinary annuity at 10% and 5 years is 3.79079. The guaranteed residual value at the end of the lease term is $120,000 and Hughey Co. expect the leased machinery to have an actual residual value of 100,000. The present value factor for a single sum at 10% and 5 years is 0.62092. The machine reverts to the lessor at the end of the lease term. Hughey uses the effective interest method and straight-line amortization. Hughey classifies the lease as a finance lease. Please round your calculations to the nearest dollar. (a) Prepare a lease amortization schedule. (b) Prepare all of the lessee's journal entries for 2011. (c) Prepare all of the lessee's journal entries for 2015, assuming that the machine is worth $60,000 at the end of the lease term when it is returned to the lessor

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