Homework Answers
The correct answer is $10,000.
Monthly payments=$554.15
Borrowing rate=12% per annum
Monthly rate=12%/12=1%
Company recorded the lease=$554.15*PVAF(1%,20)
Company recorded the lease=$554.15*$18.04555
Company recorded the lease=$10,000(rounded)
Thus, the company would record the lease at $10,000 on April 1,2021.
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