Scher Co leased a machine on December 31 . 2014 . Annual payments under the lease are $110,000 (which includes $10,000 annual executory costs) and are due on December 31 each year, for a ten-year period. The first payment was made on December 31 . 2014, and the second payment was made on December 31 . 2015 . According to the agreement, the lease payments are discounted at 1 . percent over the
lease term. Assume the present value of minimum lease payments at the inception of the lease and before the first annual payment was $615,000 and Scher appropriately classified the lease as a capital lease. What is the lease liability Scher should report in its December 31 . 2015, balance sheet?
a. $466,500
b. $515,000
c. $534,150
d. $576,500
A
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On April 1, 2016, Bennett Corporation purchased a new machine on a deferred payment basis. A down payment of $5,000 was made and 10 monthly installments of $14,000 each are to be made beginning on May 1, 2016. The cash equivalent price of the machine was $130,000. Bennett incurred and paid installation costs amounting to $6,000. The amount to be capitalized as the cost of the machine is
A) $130,000 B) $136,000 C) $145,000 D) $151,000
Comprehension questions are designed to stimulate entrepreneurs to think about their own understanding of the nature of the environment.
Answer the following statement true (T) or false (F)
________ is pay stated as a percentage of a sale amount
A) Salary B) Wage C) Commission D) Bonus
What is the PV of an ordinary annuity with 10 payments of $2,700 if the appropriate interest rate is 5.5%?
A. $16,576 B. $17,449 C. $18,367 D. $19,334 E. $20,352