Salt Inc. agrees to lease equipment from the Yellow Corporation for 6 years at $20,000 at the end of each year. The equipment has a fair value of $120,000 and an estimated useful life of 10 years. Salt Inc. can purchase the equipment at 10,000 at the end of lease (bargain purchase option). Salt can finance this lease with its bank at a 12% rate. The lessor's implicit lease rate, known to the lessee, is 10%. The lessor and the lessee use ASC 842 guidelines for lease accounting. The lease liability will be valued on Salt balance sheet at

Salt Inc. agrees to lease equipment from the Yellow Corporation for 6 years at $20,000 at the end of each year. The equipment has a fair value of $120,000 and an estimated useful life of 10 years. Salt Inc. can purchase the equipment at 10,000 at the end of lease (bargain purchase option). Salt can finance this lease with its bank at a 12% rate. The lessor's implicit lease rate, known to the lessee, is 10\%. The lessor and the lessee use ASC 842 guidelines for lease accounting. The lease liability will be valued on Salt balance sheet at