Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1. What is the initial lease liability? 7,100,000 6,450,000 9,210,000 9,600,000 2. What is the cost of the right of use asset? 8,750,000 8,700,000 9,255,000
1. What is the initial lease liability?
7,100,000
6,450,000
9,210,000
9,600,000
2. What is the cost of the right of use asset?
8,750,000
8,700,000
9,255,000
7,755,000
3. What total amount of interest expense should be reported for the current year?
710,000
785,600
804,500
830,000
4. What is the lease liability at year-end?
6,310,000
5,694,000
9,060,000
5,600,000
5. What is the depreciation of the right of use asset for the current year?
1,450,000
1,550,000
870,000
875,000
At the beginning of the current year, an entity leased a building from a lessor with the following pertinent information: Annual rental payable at the end of the year. 1,500,000 Initial direct cost paid.......... 405,000 Lease bonus paid to lessor before commencement of the lease 300,000 Lease incentive received ........... 50,000 Cost of restoring building as required by contract...... 1,500,000 Present value of restoration cost discounted at 8% for six periods. 945,000 Leasehold improvement - useful life: 8 years........... 600,000 Purchase option that is reasonably certain to be exercised 1,000,000 Lease term......... .6 years Useful life ..... Implicit interest rate ... 10% PV of an ordinary annuity of 1 for periods at 10%. 4.36 PV of an ordinary annuity of 1 for 10 periods at 10%. 6.14 Present value of 1 for 6 periods at 10%....... 0.56 Present value of 1 for 10 periods at 10%. 0.39 Present value of 1 for 6 periods at 8%. 0.36 10 yearsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started