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QUESTION 1 On January 1, 2086. Nellie Corp. (NC] entered into a lease agreement contract that ent tled it to use equipment. Details of the
QUESTION 1 On January 1, 2086. Nellie Corp. (NC] entered into a lease agreement contract that ent tled it to use equipment. Details of the contract follows Lease payment, including the non-lease component $60,000 Non-lease component (maintenance agreement) Included in lease payment $4.000 Implicit rate in the lease (readily determinable by lessee) Incremental borrowing rate Lease term 5 years Economic life of equipment 5 years Guaranteed residual value $10.000 Expected pay-out on residual value guarantee $0 000 Option to purchase No First annual payment due Jan. 1. 20X6 NC accounts for the lease and non-lease components in the contract as separate lease components. What is the amount that NC will record for interest expense for its year-ended December 31. 20%6? 3:510.951 0 0.$10.242 0-$13042 09.$10.320
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