Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment 1 2 234 3 5 6 7 8 9 10 Cash Payment $ 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 $ 12,000 Multiple Choice O $8,111 O $12,000 Effective Decrease in Outstanding Interest balance Balance $6,911 $0 6,911 6,402 5,842 5,226 4,549 3,804 $ 2,984 ? ? $ 12,000 5,089 5,598 6,158 6,774 7,451 8,196 $ 9,016 What amount would the lessee record as annual amortization on the right-of- use asset using the straight-line method? Note: Round your answer to the nearest whole dollar. ? ? $ 81,108 69,108 64,019 58,421 52,263 45,489 38,038 29,842 $ 20,826 ? ?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Refer to the following lease amortization schedule. The 10 payments are made
annually starting with the beginning of the lease. Title does not transfer to the
lessee and there is no purchase option or guaranteed residual value. The asset
has an expected economic life of 12 years. The lease is noncancelable.
Payment
1
2
3
4
5
6
7
8
9
10
O
Cash
Payment
Multiple Choice
O
$ 12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
$ 12,000
O
$8,111
$12,000
Effective Decrease in Outstanding
Interest
balance
Balance
$81, 108
69,108
64,019
58,421
52,263
45,489
38,038
29,842
$ 20,826
$6,911
$0
6,911
6,402
5,842
5,226
4,549
3,804
$ 2,984
What amount would the lessee record as annual amortization on the right-of-
use asset using the straight-line method?
Note: Round your answer to the nearest whole dollar.
•
?
?
$ 12,000
5,089
5,598
6,158
6,774
7,451
8,196
$ 9,016
?
?
?
?
Transcribed Image Text:Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment 1 2 3 4 5 6 7 8 9 10 O Cash Payment Multiple Choice O $ 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 $ 12,000 O $8,111 $12,000 Effective Decrease in Outstanding Interest balance Balance $81, 108 69,108 64,019 58,421 52,263 45,489 38,038 29,842 $ 20,826 $6,911 $0 6,911 6,402 5,842 5,226 4,549 3,804 $ 2,984 What amount would the lessee record as annual amortization on the right-of- use asset using the straight-line method? Note: Round your answer to the nearest whole dollar. • ? ? $ 12,000 5,089 5,598 6,158 6,774 7,451 8,196 $ 9,016 ? ? ? ?
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