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On December 31, 2020, Reagan Inc. signed a lease with Silver Leasing Co. for some equipment having a seven-year useful life. The lease payments are
On December 31, 2020, Reagan Inc. signed a lease with Silver Leasing Co. for some equipment having a seven-year useful life. The lease payments are made by Reagan annually, beginning at signing date. Title does not transfer to the lessee, so the equipment will be returned to the lessor on December 31, 2026. There is no purchase option, and Reagan guarantees a residual value to the lessor on termination of the lease. Reagan's lease amortization schedule appears below: Decrease in Interest Balance Dec. 31 Payments 2020 2020 $73,300 2021 $73,300 2022 $73,300 2023 $73,300 2024 $73,300 2025 $73,300 2026 $29,300 $27,232 23,086 18,567 13,641 8,272 2,419 $73,300 46,068 50,214 54,733 59,659 65,028 26,881 Outstanding Balance $375,882 302,582 256,514 206, 301 151,568 91,909 26,881 At what amount would Reagan record the right-of-use asset at the beginning of the agreement? Multiple Choice O $439,800. O $302,582. O $469,100. O $375,882
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