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Calculate the amount that would be recorded

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Question - On 18 December 20X1, Kushner Construction Ltd. leased a crane from Schultz Equipment Inc. for use in a building project. The lease is for three years. The lease commences on 1 January 20x2. Annual lease payments are $150,000, payable at the beginning of each year. In addition, Kushner must pay $45,000 for delivery and set-up of the crane and another $45,000 at the end of the lease term for deconstruction and removal of the crane. The lease is not renewable. Schultz will lease the crane to other construction companies after Kushner's project is finished. The crane has a fair value of $700,000 and a useful life of ten years. Kushner's incremental borrowing rate is 8%. Calculate the amount that would be recorded as a right-of-use asset on 1 January 20x2.

Reference no: EM133143716

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