Blossom, Inc. leased equipment from Tower Company under a 4-year lease requiring equal annual payments of $444152, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4 year useful life and no salvage value. Blossom, Inc.'s incremental borrowing rate is 11% and the rate implicit in the lease (which is known by Blossom, Inc.) is 9%. Assuming that this lease is properly classified as a capital lease, what is the amount of principal reduction recorded when the second lease payment is made in Year 2?

Blossom, Inc. leased equipment from Tower Company under a 4-year lease requiring equal annual payments of $444152, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4 year useful life and no salvage value. Blossom, Inc.'s incremental b0rrowing rate is 11% and the rate implicit in the lease (which is known by Blossom, Inc.) is 9%. Assuming that this lease is properly classied as a capital lease, what is the amount of principal reduction recorded when the second lease payment is made in Year 2? . PV Ordinary PV AnnUIQ/ Due Annuit 9% 4 periods 353129 3-23972 3.44371 3.10245 1 1%, 4 periods C) $263020 O $444152 C) $342967 C) $314648