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Example #1, on January 1 2016 a company leased an automobile by signing a lease with a arket (present value) of $100,000, with 4% implicit

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Example #1, on January 1 2016 a company leased an automobile by signing a lease with a arket (present value) of $100,000, with 4% implicit interest rate. The lease is to be paid in three equal payments of $36,034.85 at the end of each year beginning December 31, 2016 Beg. Date Balance interest expense Cash Payment Reduction in Principal Principal Balance 2016 2017 2018 100,000 Capital Lease-treat like purchase of asset and note payable Date 1/1/2016 Account Name Debit Credit 12/31/2016 Debit Credit Date Account Name 12/31/2017 Debit Credit Date Account Name 12/31/2018

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