12. On December 31, 2018. Harris Co. leased a machine from Catt, Inc. for a five-year period. Equal annual payments under the lease are $2,100,000 and are due on December 31 of each year. The first payment was made on December 31, 2018, and the second payment was made on December 31, 2019. The five lease payments are discounted at 10% over the lease term. The present value of lease payments at the inception of the lease and before the first annual payment was $8.756,727. The lease is appropriately accounted for as a finance lease by Harris. In its December 31, 2019 balance sheet, Harris should report a lease liability of A) $5,706,000. B) $6,340,000. C) $5,222,400. D) $6,240,000 13. The Lease Liability account should be disclosed as A) deferred credits. B) current portions in current liabilities and the remainder in noncurrent liabilities. C) a current liability. D) a noncurrent liability. diola blon 14. The right-of-use asset is increased by A) lease incentives received. B) prepaid lease payments only. 23 C) lease prepayments made by the lessee and initial direct costs incurred by the lessee. D) initial direct costs incurred by the lessee only. 000008 STR.000, 0, 15. Which of the following are reasons why a company is involved in leasing to other companies? I. Interest revenue. II. High residual values. III. Tax incentives. IV. Guaranteed bargain purchase options. A) II, III, and IV. B) I, II, and III. olen C) I, II, IV. D) I, III, and IV