On January 1, Year 1, Savor Corporation leased equipment to Spree Company. The lease term is 9 years. The first payment of $698,000 was made on January 1, Year 1. The present value of the lease payments is $4,561,300. The lease is appropriately classified as a finance lease. Assuming the interest rate for this lease is 9%, at what amount should Spree report the right-of-use asset on December 31, Year 1, Balance Sheet? a. $3,863,300 b. $4,054,489 c. $4,124,375 d. $4,210,997

On January 1, Year 1, Savor Corporation leased equipment to Spree Company. The lease term is 9 years. The first payment of $698,000 was made on January 1, Year 1. The present value of the lease payments is $4,561,300. The lease is appropriately classified as a finance lease. Assuming the interest rate for this lease is 9%, at what amount should Spree report the right-of-use asset on December 31, Year 1, Balance Sheet? a. $3,863,300 b. $4,054,489 c. $4,124,375 d. $4,210,997

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 9RE: Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would...

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