Question: Technold Inc. sells computer systems. Technold leases computers to Lone Star Company on January 1, 2018. The manufacturing cost of the computers was $20 million
Technold Inc. sells computer systems. Technold leases computers to Lone Star Company on January 1, 2018. The manufacturing cost of the computers was $20 million This noncancelable lease had the following terms: Lease payments: $3,193,514 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: 7% semiannually Fair value of the computers at January 1, 2018: $24 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 1 0 $19,069.426 0 O $19,669,435 0 $24,000,000
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
