Thompson, Co leased equipment from Rocket Company under a four year lease requiring equal annual payments of $172,076, with the first payment due at lease inception The lease does not transfer ownership, nor is there a bargain purchase option The equipment has a 4 year useful life and no salvage value Thompsons incremental borrowing rate is 10 and the rate implicit in the lease (which is known by Thompson) is 8 Assuming that this lease is properly classified as a capital lease, what is the amount of principal reduction recorded when the second lease payment is made in Year 2 Question 2 options 1) $172,076 2) $122,833 3) $126,480 4) $136,599 Thompson, Co leased equipment from Rocket Company under a four year lease requiring equal annual payments of $172,076, with the first payment due at lease inception The lease does not transfer ownership, nor is there a bargain purchase option The equipment has a 4 year useful life and no salvage value Thompson's incremental borrowing rate is 10 and the rate implicit in the lease (which is known by Thompson) is 8 Assuming that this lease is properly classified as a capital lease, what is the amount of principal reduction recorded when the second lease payment is made in Year 2 1) $172,076 2) $122,833 3) $126,480 4) $136,599

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Thompson, Co. leased equipment from Rocket Company under a four-year lease requiring equal annual payments of $172,076, with the first payment due at lease inception.

Thompson, Co. leased equipment from Rocket Company under a four-year lease requiring equal annual payments of $172,076, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4 year useful life and no salvage value. Thompsons incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Thompson) is 8%. Assuming that this lease is properly classified as a capital lease, what is the amount of principal reduction recorded when the second lease payment is made in Year 2?

Question 2 options:

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1)	$172,076

2)	$122,833

3)	$126,480

4)	$136,599

Thompson, Co. leased equipment from Rocket Company under a four-year lease requiring equal annual payments of $172,076, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4 year useful life and no salvage value. Thompson's incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Thompson) is 8\%. Assuming that this lease is properly classified as a capital lease, what is the amount of principal reduction recorded when the second lease payment is made in Year 2? 1) $172,076 2) $122,833 3) $126,480 4) $136,599