Question
Lease 1 requires 15 annual lease payments of $100,000 beginning on December 31, 2020. Lease 2 requires 10 semi-annual lease payments of $25,000 beginning on
Lease 1 requires 15 annual lease payments of $100,000 beginning on December 31, 2020. Lease 2 requires 10 semi-annual lease payments of $25,000 beginning on June 30, 2021. Lease 3 requires the first of 6 payments of $35,000 to be deferred for 4 years. Accounting standards require the three leases to be recorded as liabilities for the present value of the scheduled payments. Assume that an annual 8% interest rate properly reflects the time value of money for the lease obligations. Required: Calculate the amounts that will appear in Lynbrooks December 31, 2020, balance sheet for the bonds and the three leases? You must show all your work to receive full credit.
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