Wong
Textiles Ltd. entered into a capital lease obligation during 2012 to acquire a
cutting machine. The amount recorded to the Leased Equipment account and the
corresponding Lease Obligation account was $85,000 at the date of signing the
lease. Wong paid the first annual lease payment of $2,330 at the date of
signing, and by the end of 2012 had recorded depreciation of $1,100 for the
machine. Using the direct format, provide the necessary disclosure for these
transactions on the statement of cash flows.
Financing
activities:
|
Cash paid on capital lease.............
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($2,330)
|
|
In the
notes to the financial statements:
|
|
|
Non-cash
Investing and Financing Activities:
|
|
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Purchase of machinery with capital lease
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$85,000
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