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HOME 1: Leasey Corp. entered into a 9-year capital lease on a warehouse on December 31, 2018. The land and building are capitalized as a
HOME 1: Leasey Corp. entered into a 9-year capital lease on a warehouse on December 31, 2018. The land and building are capitalized as a single unit. Lease payments of $52,000, which include real estate taxes of $2,000, are due annually, beginning on December 31, 2019 and every December 31 thereafter. Leasey does not know the interest rate implicit in the lease; Leasey's incremental borrowing rate is 9%. The rounded present value of an ordinary annuity for 9 years at 9% is 5.6. (a) Record the lease (b) Record the Interest Expense at Year End Record the Depreciation Expense (d) Record the lease payment (a) What amount should Leasey report as capitalized lease liability at December 31, 2019
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