What type lease did the polan funiture manafacturer sign

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Reference no: EM133334000

Problem: Poland Furniture manufacturer leased a mattress analyzer on September 30, 2024. The five-year lease agreenment calls for Poland Furniture manufacturer to make quarterly lease payment of $391,548, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. Poland Furniture manufacturer 's incremental borrowing rate is 12%. Amortization is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five year.

Required: This case is the application of ASC 842

1) What type lease did the Polan Funiture manafacturer sign? and why?

2) Determine the present value of the lease payment on September 30, 2024 (to the neares $0000)

3) What pretax amounts related to the lease would Poland Furniture manufacturer report in its balance sheet on December 31, 2024?

4) What pretax amounts related to the lease would Poland Furniture manufacturer report in its income statement for the year ended December 31, 2024?

Reference no: EM133334000

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