Question: User Company leased computer equipment from Owner Company on January 1, 20X1. The computer equipment has an expected useful life of 15 years with no expected salvage value. The terms of the lease require annual payments of $10,000 at the end of each year for 15 years with the first payment being made on December 31, 20X1. The interest rate used in computing the lease payments is 12% compounded annually. User Company is accounting for this lease as an OPERATING lease. What is the reported amount of the operating lease RIGHT-OF-USE ASSET in the balance sheet on December 31, 20X1 (the end of the FIRST year)? Note: Round your calculations to the nearest dollar. $58,109 $63,568 $66,282 $68,109
Question: User Company leased computer equipment from Owner Company on January 1, 20X1. The computer equipment has an expected useful life of 15 years with no expected salvage value. The terms of the lease require annual payments of $10,000 at the end of each year for 15 years with the first payment being made on December 31, 20X1. The interest rate used in computing the lease payments is 12% compounded annually. User Company is accounting for this lease as an OPERATING lease. What is the reported amount of the operating lease RIGHT-OF-USE ASSET in the balance sheet on December 31, 20X1 (the end of the FIRST year)? Note: Round your calculations to the nearest dollar. $58,109 $63,568 $66,282 $68,109
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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User Company leased computer equipment from Owner Company on January 1, 20X1. The computer equipment has an expected
useful life of 15 years with no expected salvage value. The terms of the lease require annual payments of $10,000 at the end of
each year for 15 years with the first payment being made on December 31, 20X1. The interest rate used in computing the lease
payments is 12% compounded annually. User Company is accounting for this lease as an OPERATING lease. What is the reported
amount of the operating lease RIGHT-OF-USE ASSET in the balance sheet on December 31, 20X1 (the end of the FIRST year)?
Note: Round your calculations to the nearest dollar. $58,109 $63,568 $66,282 $68,109
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