Bucky Corporation entered into an operating lease agreement to lease equipment from Badger, Inc. on January 1,

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Bucky Corporation entered into an operating lease agreement to lease equipment from Badger, Inc. on January 1, 2025. The lease calls for annual lease payments of $30,000, beginning on January 1, for each of the 3 years of the lease. In addition, Badger will pay Bucky $5,000 as a cash incentive for entering the lease by January 1, 2025. In relation to the lease agreement, Bucky incurred the following costs.image


Bucky’s incremental borrowing rate is 8%. If the value of the lease liability is $83,498, what amount will Bucky record as the value of the right-of-use asset on January 1, 2025, at commencement of the operating lease?

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Intermediate Accounting

ISBN: 9781119790976

18th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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