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

Question 105

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On January 1, 2014, Madison Company signed a four-year lease requiring annual payments of $15,000 with the first payment due on January 1, 2014. The fair value of the equipment leased was $50,000. Madison's incremental borrowing rate was 6%. Actuarial information for 6% follows:
On January 1, 2014, Madison Company signed a four-year lease requiring annual payments of $15,000 with the first payment due on January 1, 2014. The fair value of the equipment leased was $50,000. Madison's incremental borrowing rate was 6%. Actuarial information for 6% 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) $48,185 B) $50,000 C) $51,977 D) $55,095

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) $48,185
B) $50,000
C) $51,977
D) $55,095

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