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On March 31, 2024, Southwest Gas leased equipment from a supplier and agreed to pay...

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Accounting

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On March 31, 2024, Southwest Gas leased equipment from a supplier and agreed to pay $320,000 annually for 20 years beginning March 31,2025 . Generally accepted accounting principles require that a liability be recorded for this lease agreement for the present value of scheduled payments. Accordingly, at inception of the lease, Southwest recorded a $3,141,807 lease liability. Required: Determine the interest rate implicit in the lease agreement. Note: Use tables, Excel, or a financial calculator. (FV of \$1, PV of \$1, EVA of \$1, PVA of \$1, FVAD of \$1 and PVAD of \$1)

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