On January 1,2014,Lessee Company entered into a five-year lease which required annual payments of $120,000.The first payment was due at the inception of the lease.The present value of the minimum lease payments to initially record the lease was $500,384;the applicable discount rate was 10%.Lessee Company treated the lease as a capital lease.What is the balance of Lessee Company's lease liability immediately after the January 1,2015 payment was made?
A)$430,422
B)$260,384
C)$298,422
D)$380,384

Question

Quizplus · Accepted Answer

$298,422 = ($500,384 - $120,000)- ($120,000 + $38,038)[$38,038 = (380,384 × 10%)]

On January 1,2014,Lessee Company Entered into a Five-Year Lease Which