Pier10 Inc. entered into a five-year lease and recorded a right-of-use asset and lease liability of $132,000 on anuary 1. Pier10 Inc. was aware of the lessor's implicit rate of interest of 5%. The equipment under lease had an estimated five-year useful life with no residual value. The first lease payment of $29,037 was due upon commencement of the lease. Show the balance sheet presentation on December 31, and the income statement presentation for the year ended December 31.

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Chapter1: Financial Statements And Business Decisions
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Reporting a Finance Lease
Pier10 Inc. entered into a five-year lease and recorded a right-of-use asset and lease liability of $132,000 on
January 1. Pier10 Inc. was aware of the lessor's implicit rate of interest of 5%. The equipment under lease
had an estimated five-year useful life with no residual value. The first lease payment of $29,037 was due
upon commencement of the lease.
Show the balance sheet presentation on December 31,
and the income statement presentation for the year ended December 31.
• Note: Round your answers to the nearest whole dollar.
• Note: Do not use negative signs with your answers.
Balance Sheet
Assets
Noncurrent assets:
Liabilities
Current liabilities:
Noncurrent liabilities:
Income Statement
Expenses
Interest Expense
December 31
◆ $
◆ $
◆ $
0
$
◆ $
0
0
December 31
O O
0
0
Transcribed Image Text:Reporting a Finance Lease Pier10 Inc. entered into a five-year lease and recorded a right-of-use asset and lease liability of $132,000 on January 1. Pier10 Inc. was aware of the lessor's implicit rate of interest of 5%. The equipment under lease had an estimated five-year useful life with no residual value. The first lease payment of $29,037 was due upon commencement of the lease. Show the balance sheet presentation on December 31, and the income statement presentation for the year ended December 31. • Note: Round your answers to the nearest whole dollar. • Note: Do not use negative signs with your answers. Balance Sheet Assets Noncurrent assets: Liabilities Current liabilities: Noncurrent liabilities: Income Statement Expenses Interest Expense December 31 ◆ $ ◆ $ ◆ $ 0 $ ◆ $ 0 0 December 31 O O 0 0
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