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Plymouthville leased equipment with a fair market value of $905,863. The life of the noncancelable lease is 10 years and the economic life of the property is 10 years. Using an 8% interest rate, the present value of the minimum lease payments is $905,863. The first payment of $125,000 is due January 1 of the current year. Each additional payment is due on the first of January in the next 9 years. What is the amount of the asset to be recorded in Plymouthville's Capital Projects Fund? If no asses will be recorded, describe why.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M980030

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