Multiple Choice Question 87
On January 2, 2018, Blossom Leasing Company leases equipment to
Brick Co. with 5 equal annual payments of $158000 each, payable
beginning January 2, 2018. Brick Co. agrees to guarantee the $98000
residual value of the asset at the end of the lease term. Brick’s
incremental borrowing rate is 10%, however it knows that Blossom’s
implicit interest rate is 8%. What journal entry would Brick Co.
make at January 1, 2019 to record the second lease
payment?
PV Annuity Due |
PV Ordinary Annuity |
PV Single Sum |
|
8%, 5 periods |
4.31213 |
3.99271 |
0.68058 |
10%, 5 periods |
4.16987 |
3.79079 |
0.62092 |
|
|
|
|
Multiple Choice Question 87 On January 2, 2018, Blossom Leasing Company leases equipment to Brick Co....
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