Suppose that in addition to the $159,660 annual rental payments, Marin is also required to pay $12,000 for insurance costseach year on the building directly to the lessor, Aero Field. How would this executory cost affect the initial measurement of thelease liability and right-of-use asset? (Round answer to O decimal places, eg. 5,275.)Lease liability24 Assume that on December 31, 2019, Marin Aerospace signs a 8-year, non-cancelable lease agreement to lease a hanger from AeroField Management Company. The following information pertains to this lease agreement:1.The agreement requires equal rental payments of $159,660 beginning on December 31, 2019.2.The fair value of the building on December 31, 2019 is $1,082,878.The building has an estimated economic life of 10 years, a guaranteed residual value of $50,900, and an expected residualvalue of $36,100. Marin depreciates similar buildings on the straight-line method.3.4.The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.Marin's incremental borrowing rate is 6% per year. The lessor's implicit rate is not known by Marin.5.

A lease can be defined as an agreement where the lessee pays a certain amount of money to the lessor…

Suppose that in addition to the $159,660 annual rental payments, Marin is also required to pay $12,000 for insurance costs each year on the building directly to the lessor, Aero Field. How would this executory cost affect the initial measurement of the lease liability and right-of-use asset? (Round answer to O decimal places, eg. 5,275) Lease liability $

Suppose that in addition to the $159,660 annual rental payments, Marin is also required to pay $12,000 for insurance costs each year on the building directly to the lessor, Aero Field. How would this executory cost affect the initial measurement of the lease liability and right-of-use asset? (Round answer to O decimal places, eg. 5,275) Lease liability $

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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Please answer all parts of the question below (including the Lease Amortization Schedule). Please include all calculations and explanations.