Hangry Company leased equipment from a lessor, on January 2, 2020. The lease is for a 5-year
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Question:
Hangry Company leased equipment from a lessor, on January 2, 2020. The lease is for a 5-year period. The useful life of the asset is six years. Lessor's implisit interest rate in the lease is 8%. The present value of an annuity due of 1 for five years at 8% is 4.31213. Annual lease payments is $69,571 at the beginning of each year for five years. The lease will transfer ownership to Hangry at the end of lease term. Hangry uses the straight-line method of depreciation for all of its fixed assets. The amount that should be reported by July as the current lease payable on its December 31, 2020 statement of financial position is...
a. $124,064.10
b. $179,291.93
c. $69,571
d. $193,635.29
Expert Answer:
Answer C 69571 Lease payable at Jan 2 2020 Annual lease payment PVAD8 5 69571 431213 300000 Now let ... View the full answer
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