At the beginning of the current year, EDSA company leased a building with the following information: 1) Annual fixed payment in advance at the beginning of each lease year -1,000,000 2) initial direct cost paid 350,000 3) Lease incentive received -150,000 4) Lease bonus paid to the lessor before the commencement of lease- 100,000 5) Present value of the cost of restoring the building as required by contract discounted at 6% -200,000 6) Purchase option that is not reasonably certain to be exercised - 300,000.00 7) Lease term 5 years 8) Implicit interest rate 8% 9) PV of an annuity of 1 in advance at 8% for 5 periods 4.31 10) PV of 1 at 8% for 5 periods .68. What is the initial lease liability?

4,310,000.00

4,614,000.00

4,764,000.00

4,514,000.00

Answer rating: 100% (QA)

Answer is 4310000 Classification of lease Since the entity has option to purchase the leased asset a... View the full answer