Chicago leased machines from Brandon on December 31, 2021. The lease is a 10-year lease with annual payments of $158,000 due on December 31 of each year beginning December 31, 2021. The present value of the lease payments is $1,067,926. Chicago's incremental borrowing rate is 12% for this type of lease. The implicit rate of 10% is known by the lessee. What should be the balance in Chicago lease liability at December 31, 2022?

Chicago leased machines from Brandon on December 31, 2021. The lease is a 10-year lease with annual payments of $158,000 due on December 31 of each year beginning December 31, 2021. The present value of the lease payments is $1,067,926. Chicago's incremental borrowing rate is 12% for this type of lease. The implicit rate of 10% is known by the lessee. What should be the balance in Chicago lease liability at December 31, 2022?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 1P

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