On January 1, 2023, Ivanhoe Corp. signed a ten-year non-cancellable lease for new machinery. The terms of the lease called for Ivanhoe to make annual payments of $107000 at the end of each year for ten years, with title to pass to Ivanhoe at the end of the lease period. Ivanhoe accordingly accounted for this lease transaction as a finance lease. The machinery has an estimated useful life of 15 years and no residual value. Ivanhoe uses straight-line depreciation for all its property, plant and equipment. The lease payments were determined to have a present value of $717979 at an effective interest rate of 8%. It was also determined that the fair value of the machinery on January 1, 2023 was $683500. With respect to this lease, for the year ending December 31, 2023, Ivanhoe should report (rounded to the nearest dollar)

On January 1, 2023, Ivanhoe Corp. signed a ten-year non-cancellable lease for new machinery. The terms of the lease called for Ivanhoe to make annual payments of $107000 at the end of each year for ten years, with title to pass to Ivanhoe at the end of the lease period. Ivanhoe accordingly accounted for this lease transaction as a finance lease. The machinery has an estimated useful life of 15 years and no residual value. Ivanhoe uses straight-line depreciation for all its property, plant and equipment. The lease payments were determined to have a present value of $717979 at an effective interest rate of 8%. It was also determined that the fair value of the machinery on January 1, 2023 was $683500. With respect to this lease, for the year ending December 31, 2023, Ivanhoe should report (rounded to the nearest dollar)

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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