On January 8, Connor entered into a finance lease with a vendor for equipment. The finance lease
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Question:
On January 8, Connor entered into a finance lease with a vendor for equipment. The finance lease for seven years. The equipment had no guaranteed residual value. Under the lease terms, Connor had to pay $400,000 annually on January 8.
At the inception of the lease, the present value of an annuity due for seven years was 4.15. What amount should Connor capitalize as leased equipment?
A. $400,000
B. $1,660,000
C. $2,060,000
D. $2,800,000
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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