Reference no: EM131266387
Francisco leased equipment from Julio on December 31, 2016. The lease is a 10-year lease with annual payments of $152,000 due on December 31 of each year beginning December 31, 2016. The present value of the lease (at a 8% implicit interest rate) is $1,140,000. Francisco's incremental borrowing rate is 12% for this type of lease. The implicit rate of 8% is known by the lessee. What should be the balance in Francisco lease liability at December 31, 2017?
$913,040.
$915,040.
$988,000.
$921,550.
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