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What is the outstanding balance of the lease liability

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Question - Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million.

This noncancelable lease had the following terms: Lease payments: $2,466,754 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025.   Lease term: five years (10 semiannual payments).

No residual value; no purchase option. Economic life of equipment: five years.

Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually. Fair value of the computers at January 1, 2021: $20 million.

What is the outstanding balance of the lease liability in Lone Star's lune 30, 2021, balance sheet?

Reference no: EM133085672

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