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960'ES C $8,600

960'ES C $8,600

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Karla Salons leased equipment from Smith Company on July 1, 2024, in a finance lease. The present value of the lease payments discounted at 12% was $60,100. Ten annual lease payments of $9,500 are due each year beginning July 1, 2024. Smith Company had constructed the equipment recently for $51,500, and its retail fair value was $60,100. What amount did Smith Company record in its income statement for the reporting year ending December 31, 2024, in connection with the lease? (ignore taxes) Multiple Choice $8,600 $3,036 $11,636 $14,672
Transcribed Image Text:Karla Salons leased equipment from Smith Company on July 1, 2024, in a finance lease. The present value of the lease payments discounted at 12% was $60,100. Ten annual lease payments of $9,500 are due each year beginning July 1, 2024. Smith Company had constructed the equipment recently for $51,500, and its retail fair value was $60,100. What amount did Smith Company record in its income statement for the reporting year ending December 31, 2024, in connection with the lease? (ignore taxes) Multiple Choice $8,600 $3,036 $11,636 $14,672
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