Refer to the Following Lease Amortization Schedule

Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $2,000 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years.

-Since the lease payments under a lease agreement are normally paid at the beginning of each period, the appropriate compound interest table to be used to determine the amount at which the right-of-use asset should be recorded is the:

A) Ordinary annuity table.
B) Present value of $1 table.
C) Present value of an annuity due table.
D) Future value of an annuity due table.

Correct Answer:

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