Question
Brief Exercise 21-20 Your answer is incorrect. Try again. On December 31, 2019, Sheridan Company leased machinery from Terminator Corporation for an agreed upon lease
Brief Exercise 21-20 Your answer is incorrect. Try again. On December 31, 2019, Sheridan Company leased machinery from Terminator Corporation for an agreed upon lease term of 3 years. Sheridan agreed to make annual lease payments of $20,000, beginning on December 31, 2019. The expected residual value of the machinery at the end of the lease term is $10,000, though Sheridan does not guarantee any residual value to Terminator. What amount will Sheridan record as its lease liability on December 31, 2019, if its incremental borrowing rate is 4% and the implicit rate of the lease is unknown? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.) Click here to view factor tables. Lease liability
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