East Company leased a new machine from North Company on May 1, 2014, under a lease with the following information: East has the option to purchase the machine on May 1, 2024, by paying $50,000, which approximates the expected fair value of the machine on the option exercise date. Required: What is the amount of the capitalized leased asset on May 1, 2014?

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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
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East Company leased a new machine from North Company on May 1, 2014, under a lease with the following information:

East has the option to purchase the machine on May 1, 2024, by paying $50,000, which approximates the expected fair value of the machine on the option exercise date.

Required:

What is the amount of the capitalized leased asset on May 1, 2014?

 

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