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On January 1, 2021, Packard Corporation leased equipment to Hewlitt Company. The lease...

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Accounting

On January 1, 2021, Packard Corporation leased equipment to Hewlitt Company. The lease term is 8 years. The first payment of $459,000 was made on January 1, 2021. Remaining payments are made on December 31 each year, beginning with December 31, 2021. The equipment cost Packard Corporation $2,741,434. The present value of the lease payments is $2,769,125. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 9%, what will be the balance reported as a liability by Hewlitt in the December 31, 2022, balance sheet? (Round your final answer to nearest dollar.)

Multiple Choice

  • $2,059,036.

  • $1,785,349.

  • $2,310,125.

  • $1,535,349.

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