On January 1, 2015, Sunny Corp. leased equipment under a capital lease. Annual l
ID: 2457266 • Letter: O
Question
On January 1, 2015, Sunny Corp. leased equipment under a capital lease. Annual lease payments of $6,000 are due at the beginning of year for 5 years. The equipment’s useful life is 6 years, and the interest rate implicit in the lease is 6%. The capital lease obligation was recorded on January 1, 2015 at $26,791, and the first lease payment was made on that date. What amount should Sunny include in current liabilities for this capital lease in its December 31, 2015 balance sheet?
$3,825.
$4,753.
$6,000.
$15,587
Explanation / Answer
Current liabilities for this capital lease in its December 31, 2015 balance sheet = Amount of Liability to be paid in next 12 month
Current liabilities for this capital lease in its December 31, 2015 balance sheet =Annual lease payments - Interest Payable of 2015
Current liabilities for this capital lease in its December 31, 2015 balance sheet = 6000 - (26791-6000)*6%
Current liabilities for this capital lease in its December 31, 2015 balance sheet = $ 4753
Answer
$ 4753
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