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American Food Services, Incorporated leased a packaging machine from Barton and Barton Corporation. Barton and...

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Accounting

American Food Services, Incorporated leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1,2024. The lease agreement for the $4.7 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be four years with no residual value. Barton and Bartons implicit interest rate was 8%.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Prepare the journal entry for American Food Services at the beginning of the lease
right of use $4.7 mil
lease payable $4.7 mil
2. Prepare an amortization schedule for the four-year term of the lease.
lease payment, effective interest, decrease in balance, outstanding balance
3. & 4. Prepare the appropriate entries related to the lease on December 31,2024 and 2026
12/31/24
interest expense $
lease payable $
cash $
12/31/24
amortixation expense
right of use asset
12/31/2026
interest expense
lease payable
cash
12/31/26
amortization expense
right of use asset

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