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Lessee Company enters into a lease on January 1, 20X2 that is accounted for as a capital lease. The lease calls for quarterly payments of $15,000, beginning on January 1, 20X2, and continuing for 5 years. The last payment is due on October 1, 20X6. The lease has an implicit annual interest rate of 8%. The present value of an annuity due: -At 8% per period for 5 periods is 4.312. -At 2% per period for 20 periods is 16.678. What amount will Lessee report as a lease obligation on its financial statements dated December 31, 20X2? A. $203,657 B. $200,000 C. $208,968 D. $198,720

Lessee Company enters into a lease on January 1, 20X2 that is accounted for as a capital lease. The lease calls for quarterly payments of $15,000, beginning on January 1, 20X2, and continuing for 5 years. The last payment is due on October 1, 20X6. The lease has an implicit annual interest rate of 8%. The present value of an annuity due: -At 8% per period for 5 periods is 4.312. -At 2% per period for 20 periods is 16.678. What amount will Lessee report as a lease obligation on its financial statements dated December 31, 20X2? A. $203,657 B. $200,000 C. $208,968 D. $198,720

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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Lessee Company enters into a lease on January 1, 20X2 that is accounted for as a capital lease. The lease calls for quarterly payments of $15,000, beginning on January 1, 20X2, and continuing for 5 years. The last payment is due on October 1, 20X6. The lease has an implicit annual interest rate of 8%. The present value of an annuity due: -At 8% per period for 5 periods is 4.312. -At 2% per period for 20 periods is 16.678. What amount will Lessee report as a lease obligation on its financial statements dated December 31, 20X2? A. $203,657 B. $200,000 C. $208,968 D. $198,720
Transcribed Image Text:Lessee Company enters into a lease on January 1, 20X2 that is accounted for as a capital lease. The lease calls for quarterly payments of $15,000, beginning on January 1, 20X2, and continuing for 5 years. The last payment is due on October 1, 20X6. The lease has an implicit annual interest rate of 8%. The present value of an annuity due: -At 8% per period for 5 periods is 4.312. -At 2% per period for 20 periods is 16.678. What amount will Lessee report as a lease obligation on its financial statements dated December 31, 20X2? A. $203,657 B. $200,000 C. $208,968 D. $198,720
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