Answer:
Dec. 31, 2016
Dr Right use Asset $15,270
Cr To Lease Liability $15,270
Dec. 31, 2017
Dr Interest expense $1,221.6
Dr Lease liability $4,431.22
Cr Cash $5,652.82
Dec. 31, 2017
Dr Amortization expense$5,090
Cr To Right-of-use Asset $5,090
Dec. 31, 2018
Dr Interest expense $867.10
Dr Lease Liability $5,071.36
Cr To Cash A/c $5,935.46
Dec. 31, 2018
Dr Amortization expense $5,090
Cr To Right-of-use asset A/c $5,090
Explanation:
Date Particulars Debit ($) Credit ($)
Dec. 31, 2016
Dr Right use Asset $15,270
Cr To Lease Liability $15,270
Dec. 31, 2017
Dr Interest expense
($15,270 × 8% borrowing rate) $1,221.6
Dr Lease liability
($5,652.82 - $1,221.6) $4,431.22
Cr Cash $5,652.82
(To record interest expense)
Dec. 31, 2017
Dr Amortization expense (Asset value /Estimated useful life $15,270/ 3) $5,090
Cr To Right-of-use Asset $5,090
(To record amortization of the Right-of-use asset)
Dec. 31, 2018
Dr Interest expense
(($15,270 - $4,431.22) × 8%) $867.10
Dr Lease Liability $5,071.36
Cr To Cash A/c $5,935.46
(To record interest expense)
Dec. 31, 2018
Dr Amortization expense ($15,270 / 3) $5,090
Cr To Right-of-use asset $5,090
(To record amortization of the right-of-use asset)
