QUESTION 3

Use the information below to answer questions 3, 4, and 5

On December 31, 2020, Gold Inc. signed a lease with Silver Leasing Co. for Olympic medal-making equipment having a seven-year useful life. The lease payments are made by Gold annually, beginning at the signing date. The title does not transfer to the lessee, so the equipment will be returned to the lessor on December 31, 2026. There is no purchase option, and Gold Inc guarantees a residual value to the lessor on termination of the lease.

Reagan's lease amortization schedule appears below:

Dec. 31	Payments			Interest			Decrease in Balance			Outstanding Balance
2020											$	519,115
2020	$	90,000					$	90,000				429,115
2021	$	90,000		$	17,165			72,835				356,280
2022	$	90,000			14,251			75,749				280,531
2023	$	90,000			11,221			78,779				201,752
2024	$	90,000			8,070			81,930				119,822
2025	$	90,000			4,793			85,207				34,615
2026	$	36,000			1,385			34,615				0

In this situation, Gold:

		is the lessee in a sales-type lease.
		is the lessee in a finance lease.
		is the lessor in a finance lease.
		is the lessor in a sales-type lease.

3 points

QUESTION 4

What is the balance of the lease liability on Gold's December 31, 2024, balance sheet?

		$280,531.
		$190,530.
		$119,822
		$356,280.