Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million.

Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million. This noncancelable lease had the following terms: Lease payments: $2,466,754 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. Lease term: five years (10 semiannual payments). No residual value; no purchase option. Economic life of equipment: five years. Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually. Fair value of the computers at January 1, 2021: $20 million. What is the outstanding balance of the lease liability in Lone Star's lune 30, 2021, balance sheet? (Round your answer to the nearest whole dollar.)

A. $21,000,000

B. $17,533,246

C. $15,943,154

D. None of these choices is correct.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Probability And Statistics For Engineering And The Sciences

Authors: Jay L. Devore

9th Edition

1305251806, 978-1305251809

Students also viewed these Accounting questions

Question

Implement the following C++ code in MIPS while (tmp

Answered: 1 week ago