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On December 31, 2021, Crane, Inc. leased machinery with a fair value of $ 1525000 from Cey Rentals Co. The agreement is a 6-year noncancelable
On December 31, 2021, Crane, Inc. leased machinery with a fair value of $ 1525000 from Cey Rentals Co. The agreement is a 6-year noncancelable lease requiring annual payments of $ 290000 beginning December 31, 2021. The lease is appropriately accounted for by Crane as a finance lease. Crane's incremental borrowing rate is 11%. Crane knows the interest rate implicit in the lease payments is 10%. The present value of an annuity due of 1 for 6 years at 10% is 4.7908. The present value of an annuity due of 1 for 6 years at 11% is 4.69590. In its December 31, 2021 balance sheet, Crane should report a lease liability of $ 1235000. $ 1361811. 0 $ 1099332. O $ 1389332
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