On December 30, year 1, Rafferty Corp. leased equipment under a capital lease. Annual lease payments of
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under a capital lease. Annual lease payments of $20,000 are due
December 31 for ten years. The equipment?s useful life is ten
years, and the interest rate implicit in the lease is 10%. The capital
lease obligation was recorded on December 30, year 1, at
$135,000, and the first lease payment was made on that date.
What amount should Rafferty include in current liabilities for this
capital lease in its December 31, year 1 balance sheet?
$ 6,500
$ 8,500
$11,500
$20,000
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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