Incorrect answer icon Your answer is incorrect. Martinez Corporation entered into a finance lease to lease equipment from Highlander, Inc. on January 1, 2020. The lease calls for annual lease payments of $16,000, beginning on December 31, 2020 for each of the 5 years of the lease. In addition, Highlander, Inc. will pay Martinez Corporation $3,300 as a cash incentive for entering the lease by January 1, 2020. In relation to the lease agreement, Martinez incurred the following costs. Commissions for selling agents $800 Internal engineering costs 500 Legal fees resulting from the execution of the lease 3,800 If the value of the lease liability is $72,735, what amount will Martinez record as the value of the right-of-use asset on January 1, 2020, at commencement of the lease?
Incorrect answer icon Your answer is incorrect. Martinez Corporation entered into a finance lease to lease equipment from Highlander, Inc. on January 1, 2020. The lease calls for annual lease payments of $16,000, beginning on December 31, 2020 for each of the 5 years of the lease. In addition, Highlander, Inc. will pay Martinez Corporation $3,300 as a cash incentive for entering the lease by January 1, 2020. In relation to the lease agreement, Martinez incurred the following costs. Commissions for selling agents $800 Internal engineering costs 500 Legal fees resulting from the execution of the lease 3,800 If the value of the lease liability is $72,735, what amount will Martinez record as the value of the right-of-use asset on January 1, 2020, at commencement of the lease?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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26.
Incorrect answer icon
Your answer is incorrect.
Martinez Corporation entered into a finance lease to lease equipment from Highlander, Inc. on January 1, 2020. The lease calls for annual lease payments of $16,000, beginning on December 31, 2020 for each of the 5 years of the lease. In addition, Highlander, Inc. will pay Martinez Corporation $3,300 as a cash incentive for entering the lease by January 1, 2020. In relation to the lease agreement, Martinez incurred the following costs.
If the value of the lease liability is $72,735, what amount will Martinez record as the value of the right-of-use asset on January 1, 2020, at commencement of the lease?
| Commissions for selling agents | $800 | |
| Internal engineering costs | 500 | |
| Legal fees resulting from the execution of the lease | 3,800 |
If the value of the lease liability is $72,735, what amount will Martinez record as the value of the right-of-use asset on January 1, 2020, at commencement of the lease?
| Value of the right-of-use asset | $ |
Expert Solution
Step 1
GIVEN
calculation of value of right- of use asset
value of lease liability = $72,735
Commission for selling casts = $800
Legal fees resulting from Execution = $3,800
cash incentive = $3,300
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