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Job Description Cloud Bing Yahoo Google Wapedia Facebook Twitter Lnkedin The Weater ncepts Video Help Save& Exit Check my Required information Present and future value tables of S1 at 11% are presented below. 1 0.90090 1.11000 2 0.81162 1.23210 71252 2.1100 3 0.73119 1.367632.44371 3.3421 4 0.65873 1.51807 3.10245 4.7097 5 0.59345 1.685063.69590 6.2278 6 0.53464 1.87041 4.23054 7.9129 0.90090 1.0000 Lorien, Inc. leased tree excavators under terms of $10,000 down and four equal annual payments of $30,000 on the anniversary date of the lease. The interest rate implicit in the lease is m%. For what amount would Lorien ntially record the asset and lease labay? Multiple Choice 78 of 8 Next

Explanation / Answer

Down payment = 10000

Present value of four annual payments = 30000*Present value annuity factor(11%,4)

= 30000*3.10245 = 93073.50

Lease liability = 10000 + 93073.50 = 103073.50 i.e. 103074

Lorien should record the asset and lease liability for $103,074

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