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On December 1, year 1, Gold Star Leasing Company leases equipment to Brick Co. with...

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Accounting

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On December 1, year 1, Gold Star Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $80,000 each, payable beginning December 1 , year 1 . Brick Co. agrees to guarantee the $10,000 residual value of the asset at the end of the lease term. Brick's incremental borrowing rate is 10%, however it knows that Gold Star's implicit interest rate is 8%. Show supporting computations. Round to the nearest dollar. How much amortization expense will Brick Co. report in its income statement for the year ended December 31 , year 1 ? SHOW YOUR WORK Edit View Insert Format Tools Table

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