On September 1, 2024, a company decides to lease a new delivery truck for three years. The
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On September 1, 2024, a company decides to lease a new delivery truck for three years. The truck dealership offers the company the following options, with the first monthly lease payment beginning September 30, 2024:
1. Pay $0 down and monthly lease payments of $2,000.
2. Pay $20,000 down and monthly lease payments of $1,300.
3. Pay $40,000 down and monthly lease payments of $600.
Required:
1. For each option, calculate the present value of the lease payments using an interest rate of 5%. Round to the nearest whole dollar.
2. Record each lease on September 1, 2024.
3. For which option is the lease asset recorded for the highest amount?
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