The following lease information was obtained by a staff auditor for a client, Kroller Inc., at December 31, 2011. Indicate how this information should be presented in Kroller’s 2-year comparative financial statements. Include any notes to the statements required to meet generally accepted accounting principles. Lease payments are made on December 31 of each year.
Leased building; minimum lease payments per year; 10 years remaining life on December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 45,000
Executory costs per year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Capitalized lease value, 12% interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343,269
Accumulated amortization of leased building at December 31, 2011 . . . . . . . 114,423
Amortization expense for 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,885
Obligations under capital leases; balance at December 31, 2011 . . . . . . . . . . 239,770
Obligations under capital leases; balance at December 31, 2010 . . . . . . . . . . 254,259