Refer to the following lease amortization schedule. The 10 payments are made annually starting with the...

  

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Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment 1 2 3 4 56789 10 Cash Payment 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 Effective Interest 6,475 5,978 5,436 4,845 4, 201 3,499 2,734 ? ? Decrease in balance 12,000 5,525 6,022 6,564 7,155 7,799 8,501 9,266 ? ? What is the total effective interest paid over the term of the lease? Outstanding Balance 83,943 71,943 66,418 60,396 53,832 46,677 38,878 30,377 21,111 ? ? Multiple Choice O O $36,059. $71,943. $120,000. $83,943. Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment 1 2 3 4 56789 10 Cash Payment 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 Effective Interest 6,475 5,978 5,436 4,845 4, 201 3,499 2,734 ? ? Decrease in balance 12,000 5,525 6,022 6,564 7,155 7,799 8,501 9,266 ? ? What is the total effective interest paid over the term of the lease? Outstanding Balance 83,943 71,943 66,418 60,396 53,832 46,677 38,878 30,377 21,111 ? ? Multiple Choice O O $36,059. $71,943. $120,000. $83,943.

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