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Question 4 of 8 -5 View Policies Current Attempt in Progress ...

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Accounting

Question 4 of 8
-5
View Policies
Current Attempt in Progress
Pharoah Corporation entered into an operating lease to lease equipment from Sheridan, Inc. on January 1,2025. The lease calls for annual lease payments of $16,000, beginning on December 31, for each of the 5 years of the lease. In addition, Sheridan, Inc. will pay Pharoah Corporation $2,600 as a cash incentive for entering the lease by December 31. In relation to the lease agreement, Pharoah incurred the following costs.
Commissions for selling agents
Internal engineering costs
$600
500
2,400
Pharoah's incremental borrowing rate is 8%. If the value of the lease liability is $68,994, what amount will Pharoah record as the value of the right-of-use asset on January 1,2025, at commencement of the operating lease?
Value of the right-of-use asset
$
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