Reporting a Finance LeasePier10 Inc. entered into a five-year lease and recorded a right-of-use asset and lease liability of $88,000 onJanuary 1. Pier10 Inc. was aware of the lessor's implicit rate of interest of 5%. The equipment under lease haan estimated five-year useful life with no residual value. The first lease payment of $19,358 was due uponcommencement of the lease.Show the balance sheet presentation on December 31,and the income statement presentation for the year ended December 31.Note: Round your answers to the nearest whole dollar..Note: Do not use negative signs with your answers.AssetsBalance SheetNoncurrent assets:Right-of-Use AssetLiabilitiesCurrent liabilities:Lease LiabilityNoncurrent liabilities:Lease LiabilityIncome StatementDecember 3188,000 *19,358 ✓0 %December 31ExpensesInterest Expense$3,432 ✔Amortization Expense17,600 ✓

A lease is a contractual agreement granting the right to use an asset, such as property or…

Assets Balance Sheet December 31 Noncurrent assets: Right-of-Use Asset Liabilities Current liabilities: Lease Liability Noncurrent liabilities: Lease Liability Income Statement 88,000 x 19,358 v 0 x December 31 Expenses Interest Expense $ 3,432 Amortization Expense 17,600

Assets Balance Sheet December 31 Noncurrent assets: Right-of-Use Asset Liabilities Current liabilities: Lease Liability Noncurrent liabilities: Lease Liability Income Statement 88,000 x 19,358 v 0 x December 31 Expenses Interest Expense $ 3,432 Amortization Expense 17,600

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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