Stockton, Inc. leased machinery with a fair value of $250,000 from Lanai Machine Company on December 31, 2008. The contract is a six-year noncancelable lease with an implicit interest rate of 10 percent. The lease requires annual payments of $50,000 beginning December 31, 2008. Stockton appropriately accounted for the lease as a capital lease. Stockton's incremental borrowing rate is 12 percent. Assuming the present value of an annuity due of 1 for 6 years at 10 percent is 4.7908 and the present value of an annuity due of 1 for 6 years at 12 percent is 4.6048, what is the lease liability that Stockton should report on the balance sheet at December 31, 2008? Answer a. $189,540 b. $200,000 c. $230,240 d. $239,540,Can you explain how do you reach to the solution?,it can be answer tomorrow by 3pm, is that good for you?
Paper#9478 | Written in 18-Jul-2015Price : $25