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Calculate the amount to be recorded as a right-of-use asset

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Reference no: EM132892586

Problem - Bush Corporation leased a machine on December 31, 2021, for a three-year period. The lease agreement calls for annual payments in the amount of $18,000 on December 31 of each year beginning on December 31,2021. Bush has the option to purchase the machine on December 31, 2024, for $22,000 when its fair value is expected to be $32,000. Bush is expected to exercise its option to purchase the machine. The machine's estimated useful life is expected to be four years with no residual value. The appropriate interest rate for this lease is 10%.

Required -

1. Calculate the amount to be recorded as a right-of-use asset and the associated lease liability.

2. Prepare an amortization schedule for this lease. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an amortization schedule for this lease.

Reference no: EM132892586

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