Use
the information for McCormick Corporation from BE20–4. Assume that at December
31, 2011, McCormick made an adjusting entry to accrue interest expense of
$8,296 on the lease. Prepare McCormick’s May 1, 2012 journal entry to record
the second lease payment of $25,561. Assume that no reversing entries are made.
Interest Payable........................ 8,296
Interest Expense........................ 4,148
Lease Obligation........................ 13,117
Cash................................ 25,561
($150,000 – $25,561) X 10% X 4/12 = $4,148
