On January 1, 20x7, Babson, Inc., leased two automobiles for executive use. The lease requires Babson to make five annual payments of P13,000 beginning January 1, 20x7. Babson expects to pay P10,000 on the residual value guarantee. The interest rate implicit in the lease is 9%. Babson's recorded lease liability on initial recognition is a. 48,620 b. 44,070 c. 35,620 d. 31,070

On January 1, 20x7, Babson, Inc., leased two automobiles for executive use. The lease requires Babson to make five annual payments of P13,000 beginning January 1, 20x7. Babson expects to pay P10,000 on the residual value guarantee. The interest rate implicit in the lease is 9%. Babson's recorded lease liability on initial recognition is a. 48,620 b. 44,070 c. 35,620 d. 31,070

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

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 10GI: Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6...

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