Calculate the lease liability balance at december

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On January 1, 2038, O9d-Lc3 Company leased equipment from Z-39 Leasing Company. The lease terms require annual payments of $20,000 for five years with the first payment being due on December 31, 2038. The interest rate on the lease is 10%, and O9d-Lc3 Company will amortize the leased asset using the double declining balance method. At January 1, 2038, the equipment had an 8 year remaining useful life and the lease contract requires the equipment to be returned to Z-39 Leasing Company at the end of the lease.

Question 1: Calculate the lease liability balance at December 31, 2039 after the second lease payment is made

Reference no: EM132873387

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