Niko Ltd. signed a lease for a five-year term that requires yearly, beginning-of-year payments of $104,000 including
Question:
Niko Ltd. signed a lease for a five-year term that requires yearly, beginning-of-year payments of $104,000 including maintenance.
Based on allocating the lease payment on relative stand-alone prices, the lease component is $94,400 and the non-lease component for maintenance is $9,600. Niko has a residual guaranteed value of $26,500 at the end of the lease term. Niko’s IBR is 10%.
Required:
1. Calculate the ROU asset.
2. Record the initial journal entry at commencement of the lease.
3. How much will Niko record as an asset if the residual value is unguaranteed?
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Requirement 1 Requirement 2 Requirement 3 The ROU as...View the full answer
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Related Book For 
Intermediate Accounting Volume 2
ISBN: 9781260881240
8th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
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