The following facts pertain to a noncancelable lease between JK Co. and Lessor Inc. 1/1/2010 $18,000...

Question

Question

The following facts pertain to a noncancelable lease between JK Co. and Lessor Inc. 1/1/2010 $18,000 5 7 $75,000 $85,000 Ince

On December 31, 2014, the carrying value of the lease liability on lessee's book should be

Answer 1

Answer #1

Solution:

Option C - $0 (See workings below)

Calculation of PV of Lease Payments 8000 18000 5 Residual Value (In excess of expected residual Value) Lease Payment No of pe

Lease Amortisation Schedule Reductio Lease Interest nin Lease Date Payment Expense Liability Liability 01-01-2010 80025 01-01

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Answer 2

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