On January 1, 2018, Kay Company leased office furniture and equipment from Young Leasing Company. The...

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On January 1, 2018, Kay Company leased office furniture and equipment from Young Leasing Company. The...

On January 1, 2018, Kay Company leased office furniture and equipment
from Young Leasing Company. The terms of the lease require annual
payments of $25,000 for 20 years with the first payment being due on
December 31, 2018. Assume the interest rate on the lease is 10% and
the lease qualifies as a capital lease.

Calculate the lease liability account balance at December 31, 2019
after the second lease payment is made.

business accounting

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Answer 1

Answer #1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer 2 Firstly we have to calculate the present value of the lease 4 Present value = annual lease payment* ((1-(1+i)n-n)/1)

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Answer 2

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