The lease contract for a computer workstation requires quarterly payments of $2100 at the beginning of every three month period for five years. The lessee would otherwise have to pay an interest rate of 10% compounded quarterly to borrow funds to purchase the workstation.
a) What amount will the lessee initially report in its financial statements as the long-term lease liability?
b) What will the liability be at the end of the fourth year?

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The Answer of The lease contract for a computer workstation requires quarterly payments of $2100 at the beginning of every three month period for five years. The lessee would otherwise have to pay an interest rate of 10% compounded quarterly to borrow funds to purchase the workstation.
a) What amount will the lessee initially report in its financial statements as the long-term lease liability?
b) What will the liability be at the end of the fourth year?

The Lease Contract for a Computer Workstation Requires Quarterly Payments