Solution-What are the amounts of the right-of-use asset

What are the amounts of the right-of-use asset

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Reference no: EM132495072

Lessee entered into a 10-year equipment lease on January 1, Year 1. Annual lease payments of $40,000 are payable on January 1 each year beginning Year 1. The rate implicit in the lease is 5% and is known to the lessee. The lessee incurred $10,000 of initial direct costs. The lease is classified as an operating lease.

9 years
10 years

The present value of an ordinary annuity at 5%

7.1078
7.7217

Question 1: What are the amounts of the right-of-use asset and lease liability to be recorded at the commencement date?

Reference no: EM132495072

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What are the amounts of the right-of-use asset

Reference no: EM132495072

Reference no: EM132495072

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