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On December 30, 2021 the Cincinnati Bengals signed a seven year lease on a jet to fly Carson Palmer to away games. The lease specified
On December 30, 2021 the Cincinnati Bengals signed a seven year lease on a jet to fly Carson Palmer to away games. The lease specified annual payments of $153,000 and the Bengals made the first payment on the day the lease was signed. The Bengals knew that the interest rate implicit in the lease was 9%. The teams incremental borrowing right was 12%. The jets fair value was $839,350. What amount will the Bengals report as a lease liability on the teams December 31, 2021 balance sheet?
A. $686,350
B. $839,350
C. $748,122
D. $615,712
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