On September 30, 2018, Ferguson Imports leased a warehouse. Terms of the lease require Ferguson to make10 annual lease payments of $55,000 with the first payment due immediately. Accounting standards requirethe company to record a lease liability when recording this type of lease. Assuming an 8% interest rate, at whatamount should Ferguson record the lease liability on September 30, 2018, before the first payment is made?
On September 30, 2018, Ferguson Imports leased a warehouse. Terms of the lease require Ferguson to make10 annual lease payments of $55,000 with the first payment due immediately. Accounting standards requirethe company to record a lease liability when recording this type of lease. Assuming an 8% interest rate, at whatamount should Ferguson record the lease liability on September 30, 2018, before the first payment is made?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 10GI: Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6...
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On September 30, 2018, Ferguson Imports leased a warehouse. Terms of the lease require Ferguson to make
10 annual lease payments of $55,000 with the first payment due immediately. Accounting standards require
the company to record a lease liability when recording this type of lease. Assuming an 8% interest rate, at what
amount should Ferguson record the lease liability on September 30, 2018, before the first payment is made?
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