The Locke Corporation has just leased a metal-bending machine that calls for annual lease payments of $30,000

Question:

The Locke has just leased a metal-bending machine that calls for annual lease payments of $30,000 payable in advance. The lease period is six years, and the lease is classified as a capital lease for accounting purposes. The company's incremental borrow¬ing rate is 11 percent, whereas the lessor's implicit interest rate is 12 percent. Amortization of the lease in the first year amounts to $16,332. On the basis of this information, compute the following:
a. The accounting lease liability that will be shown on the immediately after the first lease payment.
b. The annual lease expense (amortization plus interest) in the first year as it will appear on the accounting income statement. [The interest expense is based on the accounting value determined in Part (a).] Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...