I. Leases On January 1, 2020, Cage Company contracts to lease equipment for 5 years, agreeing to make a payment of $120,987 at the beginning of each year, starting January 1, 2020. The leased equipment is to be capitalized at $550,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Cages incremental borrowing rate is 6%, and the implicit rate in the lease is 5%, which is known by Cage. Title to the equipment transfers to Cage at the end of the lease. The asset has an estimated useful life of 5 years and no residual value.

(d) What amounts will appear on the lessees December 31, 2020 balance sheet relative to the lease contract?

(d) What amounts will appear on the lessee's balance sheet at December 31, 2020? $ 120.987 Current liabilities: Lease liability Long-term liabilities: Lease liability Non-current assets: Right-of-use asset