Neal Corp. entered into a nine-year capital lease on a warehouse on December 31, 2016. Lease payments of $52,000, which includes real estate taxes of $2,000, are due annually, beginning on December 31, 2017, and every December 31 thereafter. Neal does not know the interest rate implicit in the lease; Neal’s incremental borrowing rate is 9%. The rounded present value of an ordinary annuity for nine years at 9% is 6.0. What amount should Neal report as capitalized lease liability at December 31, 2016?
a. $300,000
b. $312,000
c. $450,000
d. $468,000

Answer rating: 100% (QA)

a 300000 Explanation In the present case the lease in entered into for 9 years starting from Decembe... View the full answer