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Metcalf signs a three-year lease for an asset on January 1,20x1, which calls for annual payments of $2,000 at the beginning of each year. The
Metcalf signs a three-year lease for an asset on January 1,20x1, which calls for annual payments of $2,000 at the beginning of each year. The implicit rate is 10%, and this rate is known by the lessee. The asset has a sales value of $8,000, a 5-year life and a residual value of zero at that time. The balance in the lease liability account on December 31,20x1 is
A.3,818
B. 6,018
C. There is no liability account because this is not a capital lease
D. 3,271
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