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What amounts would appear on Pronghorn's December 31, 2022, balance sheet relative to the lease arrangement? (Round answers to 0 decimal places, e.g. 58,971.) Total Current Assets Right of Use Asset Current Liabilities Lease Liability Long-term Liabilities Lease Liability PRONGHORN STEEL COMPANY Balance Sheet December 31, 2022 Assets Liabilities 174916 []

What amounts would appear on Pronghorn's December 31, 2022, balance sheet relative to the lease arrangement? (Round answers to 0 decimal places, e.g. 58,971.) Total Current Assets Right of Use Asset Current Liabilities Lease Liability Long-term Liabilities Lease Liability PRONGHORN STEEL COMPANY Balance Sheet December 31, 2022 Assets Liabilities 174916 []

FINANCIAL ACCOUNTING
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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Pronghorn Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $56,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Pronghorn's incremental borrowing rate is 8%. Pronghorn is unaware of the rate being used by the lessor. At the end of the lease, Pronghorn has the option to buy the equipment for $5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Pronghorn uses the straight-line method of depreciation on similar owned equipment.
Transcribed Image Text:Pronghorn Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $56,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Pronghorn's incremental borrowing rate is 8%. Pronghorn is unaware of the rate being used by the lessor. At the end of the lease, Pronghorn has the option to buy the equipment for $5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Pronghorn uses the straight-line method of depreciation on similar owned equipment.
What amounts would appear on Pronghorn's December 31, 2022, balance sheet relative to the lease arrangement? (Round answers to 0 decimal places, e.g. 58,971.) Total Current Assets Right of Use Asset Current Liabilities Lease Liability Long-term Liabilities Lease Liability PRONGHORN STEEL COMPANY Balance Sheet December 31, 2022 Assets Liabilities $ $ $ 174916 [1
Transcribed Image Text:What amounts would appear on Pronghorn's December 31, 2022, balance sheet relative to the lease arrangement? (Round answers to 0 decimal places, e.g. 58,971.) Total Current Assets Right of Use Asset Current Liabilities Lease Liability Long-term Liabilities Lease Liability PRONGHORN STEEL COMPANY Balance Sheet December 31, 2022 Assets Liabilities $ $ $ 174916 [1
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