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

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

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!