7. [Lease capitalization] In 1999, Liberty Bancorp [LIBB] leased new property and accounted for the lease as
Question:
7. [Lease capitalization] In 1999, Liberty Bancorp [LIBB] leased new property and accounted for the lease as a capital lease. Until 1999. it had reported all of its leased assets as op- erating leases. The following information with respect to the capital lease was obtained from the company's 1999 annual report: Capital lease assets (net of amortization] Capitalized lease obligations Interest on capitalized leases. Repayment of capital lease obligations $2,479.570 2,596,031 223,733 3,969 Minimum lease payments over the next five years and thereafter (in Sthousands). 2000 2001 2002 2003 Capital Lease MLPs $272 $280 $288 $297 2004 Thereafter Total Capital Lease MLPs $305 $4,596 $6,038
a. Determine the amount of the capital lease at its inception.
Step by Step Answer:
The Analysis And Use Of Financial Statements
ISBN: 9780471375944
3rd Edition
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried