On January 1, 20x6, Day Corp. entered into a 10- year lease agreement with Ward, Inc. for industrial equipment. Annual lease payments of P10,000 are payable at the end of each year. Day knows that the lessor expects a 10% return on the lease. Day has a 12% incremental borrowing rate. The equipment is expected to have an estimated useful life of 10 years. Ir addition, a third party, unrelated to Day, has guaranteed to pay Ward a residual value of P5,000 at the end of the lease. E Day's January 1, 20x6 balance sheet, the principal amount the lease obligation was a. 63,374 b. 61,446 c. 58,112 d. 56,502

On January 1, 20x6, Day Corp. entered into a 10- year lease agreement with Ward, Inc. for industrial equipment. Annual lease payments of P10,000 are payable at the end of each year. Day knows that the lessor expects a 10% return on the lease. Day has a 12% incremental borrowing rate. The equipment is expected to have an estimated useful life of 10 years. Ir addition, a third party, unrelated to Day, has guaranteed to pay Ward a residual value of P5,000 at the end of the lease. E Day's January 1, 20x6 balance sheet, the principal amount the lease obligation was a. 63,374 b. 61,446 c. 58,112 d. 56,502

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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