Business, 27.03.2020 01:50 hannah1072

Oak Co. leased equipment for its entire 9‐year useful life, agreeing to pay $50,000 at the start of the lease term on December 31, 20X4 and $50,000 annually on each December 31 for the next 8 years. The present value on December 31, 20X4 of the nine lease payments over the lease term, using the rate implicit in the lease, which Oak knows to be 10%, was $316,500. The December 31, 20X4 present value of the lease payments using Oak's incremental borrowing rate of 12% was $298,500. Oak made a timely second lease payment. What amount should Oak report as capital lease liability in its December 31, 20X5 balance sheet?\

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Oak Co. leased equipment for its entire 9‐year useful life, agreeing to pay $50,000 at the start of...

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