Technold Incorporated sells computer systems. Technold leases computers to Lone Star Company on January 1, 2024. The manufacturing cost of the computers was $20 million. This noncancelable lease had the following terms: • Lease payments: $3,550,809 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: 10% semiannually. • Fair value of the computers on January 1, 2024: $24 million. What is the outstanding balance of the lease liability in Lone Star's balance sheet on June 30, 2024? Note: Round your answer to the nearest whole dollar.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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What is the outstanding balance of the lease liability in Lone Star's balance sheet on June 30, 2024?
Note: Round your answer to the nearest whole dollar.
Multiple Choice
None of these answer choices is correct.
$18,243,310
$24,000,000
$18,943,301
Transcribed Image Text:What is the outstanding balance of the lease liability in Lone Star's balance sheet on June 30, 2024? Note: Round your answer to the nearest whole dollar. Multiple Choice None of these answer choices is correct. $18,243,310 $24,000,000 $18,943,301
Technold Incorporated sells computer systems. Technold leases computers to Lone Star Company on January 1, 2024. The manufacturing cost of the
computers was $20 million.
This noncancelable lease had the following terms:
• Lease payments: $3,550,809 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: 10% semiannually.
Fair value of the computers on January 1, 2024: $24 million.
What is the outstanding balance of the lease liability in Lone Star's balance sheet on June 30, 2024?
Note: Round your answer to the nearest whole dollar.
Transcribed Image Text:Technold Incorporated sells computer systems. Technold leases computers to Lone Star Company on January 1, 2024. The manufacturing cost of the computers was $20 million. This noncancelable lease had the following terms: • Lease payments: $3,550,809 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: 10% semiannually. Fair value of the computers on January 1, 2024: $24 million. What is the outstanding balance of the lease liability in Lone Star's balance sheet on June 30, 2024? Note: Round your answer to the nearest whole dollar.
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