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Metlock Fashion Company enters into a lease arrangement with Highpoint Leasing for 5 years. Metlock agrees to pay 4% of its net sales as a
Metlock Fashion Company enters into a lease arrangement with Highpoint Leasing for 5 years. Metlock agrees to pay 4% of its net sales as a variable lease payment. Metlock does not pay any fixed payments. Metlock is a highly successful company that has achieved over $1,850,000 in net sales over the last 7 years. Both Metlock and Highpoint forecast that net sales will be a much greater amount than $1,850,000 in subsequent years. As a result, it is highly certain that Metlock will make payments of at least $74,000($1,850,0000.04) each year. What is the lease payment amount Metlock should use to record its right-of-use asset? (Do not leave any answer field blank. Enter 0 for amounts.) Lease payment $
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