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111. Mercer Company leases equipment from Devonshire Inc. for five years starting on January 1, 2025. The lease is properly classified as a finance/sales-type lease.
111. Mercer Company leases equipment from Devonshire Inc. for five years starting on January 1, 2025. The lease is properly classified as a finance/sales-type lease. The terms of the lease are as follows: 1. Devonshire will pay $2,000 in legal fees to execute the lease. 2. Devonshire will incur $1,500 of lease documentation costs after the execution of the lease. 3. Mercer will pay commissions to the lease negotiator of $2,000. 4. Mercer must prepay the last month's rental payment of $10,000. 5. Mercer pays internal engineering costs of $5,000 to identify any structural considerations when installing the equipment. 6. The initial measurement of the liability for Mercer is $150,000. hat amount will be reported for Mercer's right-of-use asset at the commencement date
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