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On January 1, 2014, Watson Company Signed a Four-Year Lease

Question 142

Multiple Choice

On January 1, 2014, Watson Company signed a four-year lease requiring annual payments of $45,000, with the first payment due on January 1, 2014. Watson's incremental borrowing rate was 7%. Actuarial information for 7% follows:

On January 1, 2014, Watson Company signed a four-year lease requiring annual payments of $45,000, with the first payment due on January 1, 2014. Watson's incremental borrowing rate was 7%. Actuarial information for 7% follows: Assuming the lease qualifies as a capital lease, what amount should be recorded as leased equipment under capital leases on January 1, 2014 (rounded to the nearest dollar) ? A) $197,424 B) $163,094 C) $152,424 D) $184,509
Assuming the lease qualifies as a capital lease, what amount should be recorded as leased equipment under capital leases on January 1, 2014 (rounded to the nearest dollar) ?


A) $197,424
B) $163,094
C) $152,424
D) $184,509

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