Questions by kobe08 - Page 64
elton electronics lease testing equipment to startup corporation. the equipment is not specialized and is delivered on january 1, 2023. THe fair value of the equipment is $83,000. THe cost of the equipment to Elton is $78,000 and the expected life of the testing equipment is 8 years. Elton incurs inital direct costs of $10,000, which they elect to expense. The lease term for the equipment is 8 years, with the first payment due upon delivery, and seven subsequent annual payments beginning on December 31, 2023 and ending on December 31, 2029. Elton implicit rate is 11% and the expect that collection of the $11,000 lease payment is probable.What is the principal balance in the Net Investment in Lease - Sale type account at the commencement of the lease?A. $46536B. $78000C. $62834D. $51834