Carla Salons leased equipment from SmithCo on July 1, 2013. The present value of the lease payments discounted at 10% was $80,000. Ten annual lease payments of $12,000 are due at the beginning of each fiscal year beginning July 1, 2013. SmithCo had constructed the equipment recently for $66,000, and its retail fair value was $100,000. Under the new ASU, what amount did SmithCo record as the net residual asset?

Question

Quizplus · Accepted Answer

The Answer of Carla Salons leased equipment from SmithCo on July 1, 2013. The present value of the lease payments discounted at 10% was $80,000. Ten annual lease payments of $12,000 are due at the beginning of each fiscal year beginning July 1, 2013. SmithCo had constructed the equipment recently for $66,000, and its retail fair value was $100,000. Under the new ASU, what amount did SmithCo record as the net residual asset?

Carla Salons Leased Equipment from SmithCo on July 1, 2013