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following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $3,000 purchase option is reasonably certain to
following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $3,000 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Effective Decrease in Outstanding Lease Payment Cash Payment Interest Balance Balance $ 42,810 1 $ 8,900 ?? ?? 33,910 2 8,900 $ 1,695 $ 7,205 26,705 3 8,900 1,335 7,565 19,140 4 8,900 957 7,943 11,197 5 8,900 ?? ?? ?? 6 $ 3,000 $ 143 $ 2,857 $ 0 What is the outstanding balance after payment 5? Multiple Choice $2.857 $3,000 $3.143 $5.857
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