On January 1, 2021, a lessee company signed a noncancelable finance lease for a piece of equipment. The lessee will make annual payments of $114,000 at the beginning of each year during the lease term, starting from 1/1/2021. The lease liability was determined to have a present value of $467,000 at an effective interest rate of 10% (assumed for ease of computation; please do not attempt computations beyond years necessary). With respect to this lease, the lessee should record interest expense for 2022 at $_________. (DO NOT round for any part of the computation.
On January 1, 2021, a lessee company signed a noncancelable finance lease for a piece of equipment. The lessee will make annual payments of $114,000 at the beginning of each year during the lease term, starting from 1/1/2021. The lease liability was determined to have a present value of $467,000 at an effective interest rate of 10% (assumed for ease of computation; please do not attempt computations beyond years necessary). With respect to this lease, the lessee should record interest expense for 2022 at $_________. (DO NOT round for any part of the computation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, a lessee company signed a noncancelable finance lease for a piece of equipment. The lessee will make annual payments of $114,000 at the beginning of each year during the lease term, starting from 1/1/2021. The lease liability was determined to have a present value of $467,000 at an effective interest rate of 10% (assumed for ease of computation; please do not attempt computations beyond years necessary). With respect to this lease, the lessee should record interest expense for 2022 at $_________. (DO NOT round for any part of the computation.)
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