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Business, 14.04.2020 18:06 tot92

. On January 2, 2018, Hanson Leasing Company leases equipment to Foley Co. with 5 equal annual payments of $240,000 each, payable beginning January 2, 2018. Foley Co. agrees to guarantee the $150,000 residual value of the asset at the end of the lease term. The expected value of the residual is $0. Foley’s incremental borrowing rate is 10%, however it knows that Hanson’s implicit interest rate is 8%. What is the amount of right-of-use asset to be recorded by Hanson at January 2, 2018?

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