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On January 1, McBK Stores leased retail space for a five-year period. Base monthly lease payments are $2,000 due at the beginning of each month,
On January 1, McBK Stores leased retail space for a five-year period. Base monthly lease payments are $2,000 due at the beginning of each month, calculated by the lessor using a 5% discount rate. The lease agreement includes a 10% percentage-of-sales provision in addition to the base lease payment. McBK estimates a 60% probability of selling at least $10,000 annually that would be subject to additional lease payments. What amount, if any, should be added to the right-of-use asset and lease payable under this rental agreement? An additional $5,000 should be added. An additional $3,000 should be added. An additional $12,000 should be added. O No additional amount should be added
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