Question
Jack & Jill Inc. leased a new machine from Georgia Co. beginning on January 1, 2021. The following information pertains to the lease: Lease term
Jack & Jill Inc. leased a new machine from Georgia Co. beginning on January 1, 2021. The following information pertains to the lease:
Lease term 5 years
Annual payment on December 31 $10,000
Useful life of machine 6 years
Implicit interest rate in lease (known by Jack & Jill) 8%
The first payment was made on December 31, 2021. The machine costed Georgia $30,000. Georgia uses the straight-line depreciation method. What will be the carrying value of the machine at December 31, 2022?
A.$25,873 on Jack & Jills (lessee) books
B.$23, 956 on Jack & Jills (lessee) books
C.$20,000 on Georgia (lessor) books
D.$18,000 on Georgia (lessor) books
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Managerial Accounting Tools For Business Decision Making
Authors: Strayer University
2010th Custom Edition
0470603534, 978-0470603536
