Business, 28.07.2021 01:00 porterdylan15

On December 31, 20X1, Roe Company leased a machine from Colt for a five-year period. Equal annual payments under the lease are $105,000 (including $5,000 annual executory costs for servicing) and are due on December 31 of each year. The first payment was made on December 31, 20X1, and the second payment was made on December 31, 20X2. The five lease payments are discounted at 10% over the lease term. The present value of minimum lease payments at the beginning of the lease and before the first annual payment was $416,987. Roe appropriately accounts for the lease as a capital lease. Required:
1. What is the lease liability that Roe should report in its December 31, 2018, balance sheet under ASC 840? (Do not round intermediate calculations.
2. Would your answer change if Roe were using ASU 2016-02 (ASC 842)?

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On December 31, 20X1, Roe Company leased a machine from Colt for a five-year period. Equal annual pa...

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