arrangement with Highpoint Leasing for 5 years. Marin agrees to pay 7% of its net sales as a variable lease payment. Marin does not pay any fixed payments. Marin is a highly successful company that has achieved over $1,200,000 in net sales over the last 7 years. Both Marin and Highpoint forecast that net sales will be a much greater amount than $1,200,000 in subsequent years. As a result, it is highly certain that Marin will make payments of at least $84,000 ($1,200,000 × 7%) each year. What is the lease

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Marin Fashion Company enters into a lease arrangement with Highpoint Leasing for 5 years. Marin agrees to pay 7% of its net sales as a variable lease payment. Marin does not pay any fixed payments. Marin is a highly successful company that has achieved over $1,200,000 in net sales over the last 7 years. Both Marin and Highpoint forecast that net sales will be a much greater amount than $1,200,000 in subsequent years. As a result, it is highly certain that Marin will make payments of at least $84,000 ($1,200,000 × 7%) each year.

What is the lease payment amount Marin should use to record its right-of-use asset?

Lease payment   $enter the lease payment in dollars 
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