Equal annual payments under the lease

Assignment Help Financial Accounting

Reference no: EM13823434

On December 31, 2014, Harris Co. leased a machine from Catt, Inc. for a five-year period. Equal annual payments under the lease are $1,050,000 (including $50,000 annual executory costs) and are due on December 31 of each year. The first payment was made on December 31, 2014, and the second payment was made on December 31, 2015. The five lease payments are discounted at 10% over the lease term. The present value of minimum lease payments at the inception of the lease and before the first annual payment was $4,170,000. The lease is appropriately accounted for as a capital lease by Harris. In its December 31, 2015 balance sheet, Harris should report a lease liability of

$2,487,000.

$3,170,000.

$3,120,000.

$2,853,000.

Reference no: EM13823434

Questions Cloud

Investment in macro company under the equity method : Ramiro Company purchased 40% of outstanding stock of Marco Company on January 1 2012, macro reported net income of $80000 and declared dividends of $20000 during 2012. How much would Ramiro adjust their investment in Macro Company under the equity me..

Discuss the elements of a crime : Oscar is arrested for violating the "Child On Line Protection Act". In answering the question discuss the elements of a crime with special emphasis on "constitutional limitations"

What is the balance of the fund : Fischer Company has decided to begin accumulating a fund for plant expansion. The company deposited $20,000 in a fund on January 2, 2012. Fischer will also deposit $60,000 annually at the end of each year, starting in 2012. The fund pays interest at ..

Minimize total inventory cost : To minimize total inventory cost, Lila should order number 6 screws per order. (Please round to an integer and include no units.)

Equal annual payments under the lease : On December 31, 2014, Harris Co. leased a machine from Catt, Inc. for a five-year period. Equal annual payments under the lease are $1,050,000 (including $50,000 annual executory costs) and are due on December 31 of each year. The first payment was m..

Imagine a scenario that is not quite as egregious as the one : Imagine a scenario that is not quite as egregious as the one referenced. Instead, imagine that a female assistant manager performed the same cavity search of the 18-year-old female employee because she thought the employee had stolen some money from ..

Focus of management accounting is decision-making authority : An important focus of management accounting is decision-making authority. Everyone within an organization has some decision-making authority. How do employees and managers know what decision making authority they have regarding firm assets?

Participative budgeting is an approach to budgeting : Participative budgeting is an approach to budgeting that

User Account

All Pages