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Rumsfeld cooperation leased a machine on December 31 2024 fo a three year period the lease agreement calls for Annual payments in the amount of
Rumsfeld cooperation leased a machine on December 31 2024 fo a three year period the lease agreement calls for Annual payments in the amount of $17000 on December 31 of each year beginning on December 31 2024. Rumsfeld has the option to purchase the machine on December 31, 2027, for $21,000 when its fair value is expected to be $31,000 (the lessee is reasonably certain to exercise option). The machines estimated useful life is expected to be six years with no residual value. The appropriate interest rate for this lease is 10%. What is the amount to be recorded as a right-of-use asset and the associated lease liability at inception of the lease? What is the amount of the right-of-use at December 31, 2025? What is the amount of the lease liability at December 31, 2025? What is the impact of earnings for the year end of December 31, 2025?
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