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

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