N Corpentered into a Nine-Year Capital Lease on a Warehouse on on December

N Corp.entered into a nine-year capital lease on a warehouse on December 31,2016.Lease payments of $26,000,which includes real estate taxes of $1,000,are due annually,beginning on December 31,2017,and every December 31 thereafter.N does not know the interest rate implicit in the lease;N's incremental borrowing rate is 9%.The rounded present value of an ordinary annuity for nine years at 9% is 6.0.What amount should N report as capitalized lease liability at December 31,2016?

A) $150,000.
B) $156,000.
C) $225,000.
D) $234,000.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free