Question: Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2018. The manufacturing cost of the computers was $21 million.

Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2018. The manufacturing cost of the computers was $21 million. This noncancelable lease had the following terms: . Lease payments: $2,845,401 semiannually; first payment at January 1, 2018; remaining payments at June 30 and December 31 each year through June 30, 2022. Lease term: 5 years (10 semi-annual payments). No residual value; no purchase option. Economic life of equipment: 5 years. Implicit interest rate and lessee's incremental borrowing rate: 3% semiannually. Fair value of the computers at January 1, 2018: $25 million. What is the outstanding balance of the lease liability in Lone Star's June 30, 2018, balance sheet? (Round your answer to the nearest dollar.) Multiple Choice $19,973,836. None of these answer choices is correct. 0 $20,473,845. $25,000,000
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