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On January 1, 2020, Most Inc. leases a machine used in its operations. The annual lease payment is $20,000 due on December 31 of 2020,
On January 1, 2020, Most Inc. leases a machine used in its operations. The annual lease payment is $20,000 due on December 31 of 2020, 2021, 2022, and 2023. The fair value of the machine on January 1, 2020 is $69,302. The machine has no residual value. Most could borrow on a four-year collateralized loan at 6%. If the lease is accounted for as a finance lease, Mosts December 31, 2020 balance sheet would show a right-to-use asset and a finance lease liability of
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Right-to-use asset ??
Finance lease liability ??
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