Question

East Company leased a new machine from North Company on May 1, 2014, under a lease with the following information:
Lease term .................. 10 years
Annual rental payable at beginning of each lease year . $40,000
Useful life of machine ...............12 years
Implicit interest rate ................. 15%

East has the option to purchase the machine on May 1, 2024, by paying $50,000, which approximates the expected fair value of the machine on the option exercise date.

Required:
What is the amount of the capitalized leased asset on May 1, 2014?



$1.99
Sales0
Views117
Comments0
  • CreatedSeptember 10, 2014
  • Files Included
Post your question
5000