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Scenario 4: Initial direct costs7. Additional information: The lease payments are due at the beginning...

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Accounting

Scenario 4: Initial direct costs7. Additional information: The lease payments are due at the beginning of each year. Sunset Co. incurred initial direct costs of 30,000 in negotiating the lease. The annual rent includes 5,000 for insurance cost. The insurance is intended to protect April, Inc.'s investment in the machine, and therefore, does not transfer any good or service to Sunset Co. Sunset Co. has the option to purchase the machine at the end of the lease term by paying 380,000, which is expected to be approximately equal to the machine's fair value on that date.At lease commencement, Sunset Co. is reasonably certain to exercise the purchase option.How much are the carrying amounts of the (1) right-of-use asset and (2) lease liability on December 31,20x1? a.1,400,952; 1,428,142c.1,375,480; 1,228,142b.1,400,952; 1,375,480d.1,428,142; 1,258,142

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