What is the balance of lawsons lease liability at december

Reference no: EM131900550

Problem

Lawson leased equipment from Tirado on January 1 of the current year. The lease is a 12 year lease with annual payments of $175,000 due on each January 1, beginning with the current year. The present value of the lease is $1,424,318. Lawson's incremental borrowing rate is 10%; Lawson knows that Tirado's implicit interest rate is 8%. What is the balance of Lawson's lease liability at December 31 or the current year?

Reference no: EM131900550

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