On December 31, 2022, Sunland Corp. leased a machine from Eastern Star Ltd. for a...
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On December 31, 2022, Sunland Corp. leased a machine from Eastern Star Ltd. for a five-year period. Annual lease payments are $318000 (including $14000 annual executory costs), due on December 31 each year. The first payment was made on December 31 , 2022, and the second payment on December 31, 2023. The appropriate interest rate for this type of lease is 10%. The present value of the minimum lease payments at the inception of the lease (before the first payment) was $1267680. The lease is being accounted for as a finance lease by Sunland. On its December 31, 2023 statement of financial position, Sunland should report a lease liability of $207632.$756048.$963680.$96368.
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