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Durney Co. recorded a right-of-use asset of $800,000 in a ten-year finance lease. The interest...

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Accounting

Durney Co. recorded a right-of-use asset of $800,000 in a ten-year finance lease. The interest rate charged by the lessor was 10%. The balance in the right-of-use asset after two years will be: A) $648,000 B) $968.000 C) $640,000 D) $880,000 On January 1, Smith Industries leased equipment to a customer for a four-year period, at which time possession of the leased asset will revert back to Smith. The equipment cost Smith $430,000 and has an expected useful life of six years. Its normal sales price is $430,000. The residual value after four years is $100,000. Lease payments are due on December 31 of each year, beginning with the first payment at the end of the first year. The interest rate is 11%. Calculate the amount of the annual lease payments. (Round your answer to the nearest whole dollar.) The present value of $1: n=4, i= 11% is 0.65873. The present value of an ordinary annuity of $1: n=4, -11% is 3.10245. The present value of an annuity due of $1: n=4, i=11% is 3.44371. A) $105,737 B) $138,600 C) $82,253 D) $117,368

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