On January 1, Lessee Company leases equipment with a useful life of 5 years for...
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Accounting
On January 1, Lessee Company leases equipment with a useful life of 5 years for a 3-year lease term. Payments of $52,000 are due at the beginning of each year. The incremental borrowing rate is 3%. The present value of the payments is $151,320. Which of the following is true?
a. Lease expense at the end of the first year is $52,000.
b. Amortization expense at the end of the first year is $151,320 divided by 3.
c. The lease liability at the end of the first year is reduced by $52,000.
d. The ROU asset at the end of the first year is $99,320.
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