Question
Harmeling Paint Ball (HPB) Corporation needs a new air compressor that costs $80,000. HPB will need it for only 3 years even though the compressor's
Harmeling Paint Ball (HPB) Corporation needs a new air compressor that costs $80,000. HPB will need it for only 3 years even though the compressor's economic life is long enough so that the lease is an operating lease. The firm can lease the compressor for 3 years with $15,000 lease payments at the end of each year. HPB's cost of debt is 12%. Answer the following questions. (Hint: See Table 19-1.)
a.What is the initial lease liability that must be reported on the balance sheet?
b.What is the initial right-of-use asset?
c.What will HPB report as the Year-1 lease expense?
d.What is the Year-1 imputed interest expense?
e. What lease liability must be reported at Year 1?
f. What right-of-use asset must be reported at Year 1?
answers below but I need to show work- if at all possible make it easy enough to copy and paste on excel
a.$36,027.47. b.$36,027.47. c.$15,000. d.$4,323.30. e.$25,350.77. f.$25,350.77.
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