Technold Incorporated sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2024. The manufacturing cost of the computers was $18 million. This noncancelable lease had the following terms: Lease payments: $3,144,993 semiannually, first payment on January 1, 2024; remaining payments on June 30 and December 31 each year through June 30, 2028 • Lease term: 5 years (10 semiannual payments). No residual value; no purchase option. Economic life of equipment: 5 years. • Implicit interest rate and lessee's incremental borrowing rate: 9% semiannually. • Fair value of the computers on January 1, 2024: $22 million. What is the outstanding balance of the lease liability in Lone Star's balance sheet on June 30, 2024?
Technold Incorporated sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2024. The manufacturing cost of the computers was $18 million. This noncancelable lease had the following terms: Lease payments: $3,144,993 semiannually, first payment on January 1, 2024; remaining payments on June 30 and December 31 each year through June 30, 2028 • Lease term: 5 years (10 semiannual payments). No residual value; no purchase option. Economic life of equipment: 5 years. • Implicit interest rate and lessee's incremental borrowing rate: 9% semiannually. • Fair value of the computers on January 1, 2024: $22 million. What is the outstanding balance of the lease liability in Lone Star's balance sheet on June 30, 2024?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Technold Incorporated sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2024. The manufacturing cost of the
computers was $18 million.
This noncancelable lease had the following terms:
• Lease payments: $3,144,993 semiannually; first payment on January 1, 2024; remaining payments on June 30 and December 31 each year through
June 30, 2028.
. Lease term: 5 years (10 semiannual payments).
No residual value; no purchase option.
• Economic life of equipment: 5 years.
• Implicit interest rate and lessee's incremental borrowing rate: 9% semiannually.
• Fair value of the computers on January 1, 2024: $22 million.
What is the outstanding balance of the lease liability in Lone Star's balance sheet on June 30, 20247
Note: Round your answer to the nearest whole dollar.
Multiple Choice
$17,406,965
$16.706.974
$22,000,000
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