Question
On January 1, 2016, Packard Corporation leased equipment to Hewlitt Company. The lease term is 10 years. The first payment of $455,000 was made on
On January 1, 2016, Packard Corporation leased equipment to Hewlitt Company. The lease term is 10 years. The first payment of $455,000 was made on January 1, 2016. Remaining payments are made on December 31 each year, beginning with December 31, 2016. The equipment cost Packard Corporation $2,639,400. The present value of the minimum lease payments is $2,879,400. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 12%, what will be the balance reported as a liability by Hewlitt in the December 31, 2017, balance sheet? (Round final answer to the nearest dollar.) |
$2,260,328.
$2,167,067.
$2,424,400.
$2,076,567.
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