Question
Warrior Inc. leased a commercial generator from Portland Inc. on January 1, 2021 under a 2-year operating lease . Quarterly payments of $21,000 are due
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Warrior Inc. leased a commercial generator from Portland Inc. on January 1, 2021 under a 2-year operating lease. Quarterly payments of $21,000 are due at the beginning of each quarter with the first payment due on January 1, 2021. Portland purchased the generator from Magnum Corp. at a cost of $256,000, which is also its fair value. The economic life of the generator is 5 years and the interest rate implicit in the lease is 8%. Warrior records amortization every quarter.
What is the balance in the right-of-use asset account at April 1, 2021?
A. $135,912
B. $138,630
C. $139,563
D. $137,298
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Corporate Finance Core Principles And Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
6th Edition
1260571122, 978-1260571127
