Bucky Corporation entered into an operating lease agreement to lease equipment from Badger, Inc. on January 1, 2020. The lease calls for annual lease payments of $30,000, beginning on January 1, for each of the 3 years of the lease. In addition, Badger will pay Bucky $5,000 as a cash incentive for entering the lease by January 1, 2020. In relation to the lease agreement, Bucky incurred the following costs. Salaries of employees involved in the investigation of the lease $2,000 Lease document preparation costs incurred after execution of the lease 500 Bucky's incremental borrowing rate is 8%. If the value of the lease liability is $83,498, what amount will Bucky record as the value of the right-of-use asset on January 1, 2020, at commencement of the operating lease? BE21.26 (LO 4) Homestead Corporation entered into an operating lease to lease equipment from Highlander, Inc. on January 1, 2020. The lease calls for annual lease payments of $10,000, beginning on December 31, for each of the 5 years of the lease. In addition, Highlander, Inc. will pay Homestead Corporation $2,000 as a cash incentive for entering the lease by December 31. In relation to the lease agreement, Homestead incurred the following costs. Commissions for selling agents $1.900 Internal engineering costs 500 Legal fees resulting from the execution of the lease 3,000 Homestead's incremental borrowing rate is 6%. If the value of the lease liability is $44,651, what amount will Homestead record as the value of the right-of-use asset on January 1, 2020, at commencement of the operating lease?

Question

Bucky Corporation entered into an operating lease agreement to lease equipment from Badger, Inc. on January 1, 2020. The lease calls for annual lease payments of $30,000, beginning on January 1, for each of the 3 years of the lease. In addition, Badger will pay Bucky $5,000 as a cash incentive for entering the lease by January 1, 2020. In relation to the lease agreement, Bucky incurred the following costs.

Salaries of employees involved in the investigation of the lease
$2,000
Lease document preparation costs incurred after execution of the lease
500

Bucky's incremental borrowing rate is 8%. If the value of the lease liability is $83,498, what amount will Bucky record as the value of the right-of-use asset on January 1, 2020, at commencement of the operating lease?

BE21.26 (LO 4) Homestead Corporation entered into an operating lease to lease equipment from Highlander, Inc. on January 1, 2020. The lease calls for annual lease payments of $10,000, beginning on December 31, for each of the 5 years of the lease. In addition, Highlander, Inc. will pay Homestead Corporation $2,000 as a cash incentive for entering the lease by December 31. In relation to the lease agreement, Homestead incurred the following costs.

Commissions for selling agents
$1.900
Internal engineering costs
500
Legal fees resulting from the execution of the lease
3,000

Homestead's incremental borrowing rate is 6%. If the value of the lease liability is $44,651, what amount will Homestead record as the value of the right-of-use asset on January 1, 2020, at commencement of the operating lease?

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