Williams Co. entered into a lease agreement for a new delivery truck on December 31, 20X4, which it classified as an operating lease. Under the terms of the lease, Williams is required to make annual lease payments of $35,000 for four years, beginning on December 31, 20X5. The present value of the lease payments is $113,390 and the implicit interest rate in the contract is 9%. What amount will Williams report as lease expense on its 20X5 income statement?

Answer rating: 100% (QA)

To determine the lease expense for 20X5 we need to calculate the interest expense and the amortizati... View the full answer