Warrior Inc. leased a commercial generator from Portland Inc. on January 1, 2021 under a 2-year operating lease. Quarterly payments of $21,000 are due at the beginning of each quarter with the first payment due on January 1, 2021. Portland purchased the generator from Magnum Corp. at a cost of $256,000, which is also its fair value. The economic life of the generator is 5 years and the interest rate implicit in the lease is 8%. Warrior records amortization every quarter. What is the balance in the lease payable at July 1, 2021?
Warrior Inc. leased a commercial generator from Portland Inc. on January 1, 2021 under a 2-year operating lease. Quarterly payments of $21,000 are due at the beginning of each quarter with the first payment due on January 1, 2021. Portland purchased the generator from Magnum Corp. at a cost of $256,000, which is also its fair value. The economic life of the generator is 5 years and the interest rate implicit in the lease is 8%. Warrior records amortization every quarter. What is the balance in the lease payable at July 1, 2021?
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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Warrior Inc. leased a commercial generator from Portland Inc. on January 1, 2021 under a 2-year operating lease. Quarterly payments of $21,000 are due at the beginning of each quarter with the first payment due on January 1, 2021. Portland purchased the generator from Magnum Corp. at a cost of $256,000, which is also its fair value. The economic life of the generator is 5 years and the interest rate implicit in the lease is 8%. Warrior records amortization every quarter.
What is the balance in the lease payable at July 1, 2021?
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