Question
CHAPTER 15 (18.) On January 1, 2018, National Insulation Corporation (NIC) leased equipment from United Leasing under a finance lease. Lease payments are made annually.
CHAPTER 15 (18.)
On January 1, 2018, National Insulation Corporation (NIC) leased equipment from United Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by NIC. Portions of the United Leasings lease amortization schedule appear below: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Jan. 1 | Payments | Effective Interest | Decrease in Balance | Outstanding Balance | ||||
2018 | 225,001 | |||||||
2018 | 26,000 | 26,000 | 199,001 | |||||
2019 | 26,000 | 23,880 | 2,120 | 196,881 | ||||
2020 | 26,000 | 23,626 | 2,374 | 194,507 | ||||
2021 | 26,000 | 23,341 | 2,659 | 191,848 | ||||
2022 | 26,000 | 23,022 | 2,978 | 188,870 | ||||
2023 | 26,000 | 22,664 | 3,336 | 185,534 | ||||
2035 | 26,000 | 13,004 | 12,996 | 95,374 | ||||
2036 | 26,000 | 11,445 | 14,555 | 80,819 | ||||
2037 | 26,000 | 9,698 | 16,302 | 64,517 | ||||
2038 | 72,259 | 7,742 | 64,517 | 0 | ||||
Required:
8. What amount would NIC record as a right-of-use asset at the beginning of the lease? (Round your answers to nearest whole dollar.)
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