1. What is the lease liability on January 1, 2020?

a) 1,516,000

b) 2,263,000

c) 1,884,000

d) 1,697,250

2. What is the interest expense for 2020?

a) 188,400

b) 226,300

c) 151,600

d) 169,725

3. What is the interest expense for 2023?

a) 151,460

b) 126,606

c) 164,964

d) 200,000

4. What is the lease liability on December 31, 2023?

a) 1,614,604

b) 1,266,064

c) 1,366,064

d) 1,214,604

On January 1, 2020, Northstar Company entered into an 8-year lease of a floor of building with useful life of 15 years with the following terms: Annual rental for the first three years payable at the end of each year 300,000 Annual rental for the next five years payable at the end of each year 400,000 Implicit interest rate 10% PV of an ordinary annuity of 1 at 10% for three periods 2.49 PV of an ordinary annuity of 1 at 10% for five periods PV of 1 at 10% for three periods 0.75 The lease provides for neither a transfer of title to the lessee nor a purchase option. 3.79