Solution-What is the amount recorded for the leased asset

What is the amount recorded for the leased asset

Reference no: EM132967074

Question - We assume the lease is properly classified as a finance lease. Pisa, Inc. leased equipment from Tower Company under a four-year lease requiring equal annual payments of $344,152, with the first payment due at lease inception on 1/1/2018. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4-year useful life and no salvage value. If Pisa, Inc.'s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Pisa, Inc.) is 8%,

PV Annuity Due PV Ordinary Annuity

8%, 4 periods 3.57710 3.31213

10%, 4 periods 3.48685 3.16986

What is the amount recorded for the leased asset at the lease inception on 1/1/2018?

Reference no: EM132967074

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What is the amount recorded for the leased asset

Reference no: EM132967074

Reference no: EM132967074

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