Comparisons of Operating and Sales-Type Leases On January 1, 2019, Nelson Company leases certain property to Queens Company at an annual rental of $60,000 payable in advance at the beginning of each year for 8 years. The first payment is received immediately. The leased property, which is new, cost $275,000 and has an estimated economic life of 8 years and no residual value. The interest rate implicit in the lease is 12% and the lease is noncancelable. Nelson had no other costs associated with this lease. It should have accounted for this lease as a sales-type lease but mistakenly treated it as an operating lease.
Required:
Next Level Compute the effect on income before income taxes during the first year of the lease as a result of Nelson’s classification of this lease as |in operating rather than a sales-type lease. Round your answer to the nearest dollar.
Accounting Information Systems
College Accounting, Chapters 1-27
Financial & Managerial Accounting
Corporate Financial Accounting
Financial Accounting
Managerial Accounting: The Cornerstone of Business Decision-Making
Financial And Managerial Accounting
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Accounting Information Systems
Contemporary Marketing
Essentials of Economics (MindTap Course List)
Fundamentals of Financial Management (MindTap Course List)
Essentials of Business Communication (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
Principles of Economics (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
STATISTICS F/BUSINESS+ECONOMICS-TEXT
MKTG 12:STUDENT ED.-TEXT
Principles of Macroeconomics (MindTap Course List)
Foundations of Business (MindTap Course List)
Management, Loose-Leaf Version
College Accounting (Book Only): A Career Approach
Financial & Managerial Accounting
Financial Accounting
Accounting (Text Only)
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
College Accounting (Book Only): A Career Approach
Statistics for Business & Economics, Revised (MindTap Course List)
Exploring Economics
Principles of Macroeconomics (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Fundamentals of Financial Management (MindTap Course List)
Pkg Acc Infor Systems MS VISIO CD
Survey of Accounting (Accounting I)
Corporate Financial Accounting
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Macroeconomics
Practical Management Science
Cornerstones of Cost Management (Cornerstones Series)
Purchasing and Supply Chain Management
Economics For Today
Microeconomics
Economics (MindTap Course List)
Managerial Accounting
Cornerstones of Financial Accounting
MACROECONOMICS FOR TODAY
Macroeconomics: Private and Public Choice (MindTap Course List)
Micro Economics For Today
Microeconomics: Private and Public Choice (MindTap Course List)
Principles of Microeconomics
Understanding Management (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)