East Company leased a new machine from North Company on May 1, 2008 under a lease with

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East Company leased a new machine from North Company on May 1, 2008 under a lease with the following information:

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East has the option to purchase the machine on May 1, 2018 by paying $50,000, which approximates the expected fair value of the machine on the option exercise date.
Required:
What is the amount of the capitalized leased asset on May 1, 2008?

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Financial Reporting And Analysis

ISBN: 12

4th Edition

Authors: Lawrence Revsine, Daniel Collins

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Question Posted: May 22, 2024 05:01 AM

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East Company leased a new machine from North Company on May 1, 2008 under a lease with

Question:

Lease term Annual rental payable at beginning of each lease year Useful life of machine Implicit interest rate Present value of an annuity of $1 paid at the beginning of each of 10 periods at 14% Present value of $1 due at the end of 10 periods at 14% 10 years $40,000 12 years 14% 5.95 0.27

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Financial Reporting And Analysis

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