The following information relates to an equipment lease with an inception date of January 1: Fair value of equipment at lease inception, $56,000 Lease term, 5 years Economic life of property, 6 years Implicit interest rate, 7% Annual lease payment due on December 31, $13,200   The equipment reverts back to the lessor at the end of the lease term. How much is recorded as the lease liability on the lease inception date?   Select one: a. $66,000 b. $56,000 c. $57,911 d. $54,123

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.