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On 1-1-2021, Stone Corporation (lessor) agrees to rent machinery to the Micheals Company (lessee). It is a 6-year noncancelable lease requiring Micheals to pay Stone

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On 1-1-2021, Stone Corporation (lessor) agrees to rent machinery to the Micheals Company (lessee). It is a 6-year noncancelable lease requiring Micheals to pay Stone $100,000 every 12-31 during the lease period (i.e., 2021-2026). Micheals has the option to extend the original lease for 3 additional years, i.e., 2027-2029. If Micheals decides to extend the lease, Micheals must do so by 4-1-2026 by signing a 3-year extension requiring payments of $100,000 every 12-31 during the extension (i.e., 2027-2029). The lessor's implicit rate is 6% per year; this rate is known to the lessee. The management of Micheals has determined that this is a finance lease. On 1-1-2021, both the lessee and the lessor believed that it was reasonably certain that Micheals, lessee, would extend the original lease for 3 years. What will be the right of use asset related to the lease on the 1-1-2021 balance sheet of Michaels Corporation (lessee)

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