On January 1, 2016, Pearson Company signed a lease agreement requiring six annual payments of $60,000, beginning December 31, 2016. Pearson's incremental borrowing rate was 9% and the lessor's implicit rate, known by Pearson, was 10%. The present value factors of an ordinary annuity of $1 for six periods for interest rates of 9% and 10% are 4.48592 and 4.35526, respectively. 37. Refer to Exhibit 20-1 17. What would be the interest expense for 2016 (round answers to the nearest dollar)? a. $21,003 b. $22,746 c. $24,224 d. $26,132
On January 1, 2016, Pearson Company signed a lease agreement requiring six annual payments of $60,000, beginning December 31, 2016. Pearson's incremental borrowing rate was 9% and the lessor's implicit rate, known by Pearson, was 10%. The present value factors of an ordinary annuity of $1 for six periods for interest rates of 9% and 10% are 4.48592 and 4.35526, respectively. 37. Refer to Exhibit 20-1 17. What would be the interest expense for 2016 (round answers to the nearest dollar)? a. $21,003 b. $22,746 c. $24,224 d. $26,132
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 65BE
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Exhibit 20-1
On January 1, 2016, Pearson Company signed a lease agreement requiring six annual payments of $60,000, beginning December 31, 2016. Pearson's incremental borrowing rate was 9% and the lessor's implicit rate, known by Pearson, was 10%. The present value factors of an ordinary annuity of $1 for six periods for interest rates of 9% and 10% are 4.48592 and 4.35526, respectively. 37.
Refer to Exhibit 20-1
17. What would be the interest expense for 2016 (round answers to the nearest dollar)?
a. $21,003
b. $22,746
c. $24,224
d. $26,132
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