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East Co leased a new machine from North Co n May 1, 2016, under a...

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Accounting

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East Co leased a new machine from North Co n May 1, 2016, under a lease with the following information: Lease term 10 years annual lease payments due at the beginning of each lease year $40,000 remaining useful life of the machine 12 years implicit interest rate 14% Present value factor for an annuity due n+10,14% 5.95 Present value factor of $1 with terms ns10,14% 0.27 East has the option to purchase the machine on May 1, 2023 by paying a bargain price of $5.000 Question: What value should East Co. Initially record on May 1st to establish the Lease Liability? $243.000 5238,000 5236,650 5239 350

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