Multiple Choice
Sanborn,Inc. ,leased equipment from Chase Supply on December 31,2014.The lease term is for the 10-year period expiring December 30,2021.The useful life of the leased asset is 10 years.Equal annual payments under the lease are $100,000 due on December 31 of each year.The first payment was made on December 31,2014.Sanborn's incremental borrowing rate was 12% at December 31,2014.Chase's implicit rate for the lease is 10% and is known by Sanborn.Sanborn appropriately accounts for the lease as a capital lease. What is the balance in Sanborn's "Liability Under Lease Agreements" account at December 31,2015?
A) $533,492
B) $545,010
C) $643,492
D) $800,000
Correct Answer:
Verified
Correct Answer:
Verified
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