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Scott Co. entered into a 5-year capital lease requiring it to make equal annual payments....

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Question

Accounting

Scott Co. entered into a 5-year capital lease requiring it to make equal annual payments. The reduction of the lease liability in Year 2 should equal:

Select one:

a. The current liability shown for the lease at the end of Year 1

b. The current liability shown for the lease at the end of Year 2

c. The reduction of the lease obligation in Year 1

d. One-fifth of the original lease liability

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