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On January 2, 2019, Lafayette Machine Shops Inc. signed a 10-year noncancelable lease for a heavy-duty drill press, stipulating annual payments of $15,000 starting at the end of the first year, with title passing to Lafayette at the expiration of the lease. Lafayette treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years with no salvage value. Lafayette uses straight-line depreciation for all of its fixed assets. Aggregate lease payments were determined to have a present value of $92,170, based on implicit interest of 10%. For 2019, Lafayette should record:

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 20, Problem 7MC
Textbook Problem

On January 2, 2019, Lafayette Machine Shops Inc. signed a 10-year noncancelable lease for a heavy-duty drill press, stipulating annual payments of $15,000 starting at the end of the first year, with title passing to Lafayette at the expiration of the lease. Lafayette treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years with no salvage value. Lafayette uses straight-line depreciation for all of its fixed assets. Aggregate lease payments were determined to have a present value of $92,170, based on implicit interest of 10%. For 2019, Lafayette should record:

Chapter 20, Problem 7MC, On January 2, 2019, Lafayette Machine Shops Inc. signed a 10-year noncancelable lease for a

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Chapter 20 Solutions

Intermediate Accounting: Reporting And Analysis
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