Solution-What will be the balance reported as a liability

What will be the balance reported as a liability

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Question - On January 1, 2018, Packard Corporation leased equipment to Hewlitt Company. The lease term is 10 years. The first payment of $459,000 was made on January 1, 2018. Remaining payments are made on December 31 each year, beginning with December 31, 2018. The equipment cost Packard Corporation $2,760,500. The present value of the lease payments is $3,000,500. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 11%, what will be the balance reported as a liability by Hewlitt in the December 31, 2019, balance sheet?

a. $2,083,392.

b. $2,362,065.

c. $2,541,500.

d. $2,162,892.

Reference no: EM132604567

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What will be the balance reported as a liability

Reference no: EM132604567

Reference no: EM132604567

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