Red Co. recorded a right-of-use asset of $100,000 in a 10-year finance lease. Payments of $16,275 are made annually at the end of each year. The interest rate charged by the lessor was 10%. The balance in the lease payable after two years will be:
A) $80,000.
B) $86,823.
C) $116,309.
D) $121,000.

Question

Quizplus · Accepted Answer

11ea937b_35dd_cc85_a419_43a962c76dcd_TB2599_00 Balance: $100,000 ? 6,275 ? 6,902 = $86,823

Red Co Recorded a Right-Of-Use Asset of $100,000 in a 10-Year