At the beginning of the year,a firm leased equipment on a capital lease,capitalizing $60,000 in both its lease liability and leased assets accounts.The contract calls for December 31 payments of $15,000.The lessee's annual reporting period ends December 31 and the contract reflects 10% interest.The lessee made the first payment as required.The direct method statement of cash flows for the lessee should reflect which of the following in the first year of the lease contract (ignore noncash disclosures)?
A) $15,000 financing cash outflow
B) $15,000 operating cash outflow
C) $6,000 operating cash outflow;$9,000 financing cash outflow
D) $9,000 financing cash outflow

Question

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The Answer of At the beginning of the year,a firm leased equipment on a capital lease,capitalizing $60,000 in both its lease liability and leased assets accounts.The contract calls for December 31 payments of $15,000.The lessee's annual reporting period ends December 31 and the contract reflects 10% interest.The lessee made the first payment as required.The direct method statement of cash flows for the lessee should reflect which of the following in the first year of the lease contract (ignore noncash disclosures)?
A) $15,000 financing cash outflow
B) $15,000 operating cash outflow
C) $6,000 operating cash outflow;$9,000 financing cash outflow
D) $9,000 financing cash outflow

At the Beginning of the Year,a Firm Leased Equipment on a Capital