Question

On December 31, 2022, Sunland Corp. leased a machine from Eastern Star Ltd. for a five-year period. Annual lease payments are $318000 (including $14000 annual executory costs), due on December 31 each year. The first payment was made on December 31, 2022, and the second payment on December 31, 2023. The appropriate interest rate for this type of lease is 10%. The present value of the minimum lease payments at the inception of the lease (before the first payment) was $1267680. The lease is being accounted for as a finance lease by Sunland. On its December 31, 2023 statement of financial position, Sunland should report a lease liability of $207632. $756048. $963680. $96368.

          On December 31, 2022, Sunland Corp. leased a machine from Eastern Star Ltd. for a five-year period. Annual lease payments are
$318000 (including $14000 annual executory costs), due on December 31 each year. The first payment was made on December 31,
2022, and the second payment on December 31, 2023. The appropriate interest rate for this type of lease is 10%. The present value of
the minimum lease payments at the inception of the lease (before the first payment) was $1267680. The lease is being accounted for
as a finance lease by Sunland. On its December 31, 2023 statement of financial position, Sunland should report a lease liability of
$207632.
$756048.
$963680.
$96368.

On December 31, 2022, Sunland Corp. leased a machine from Eastern Star Ltd. for a five-year period. Annual lease payments are
318000 (including14000 annual executory costs), due on December 31 each year. The first payment was made on December 31,
2022, and the second payment on December 31, 2023. The appropriate interest rate for this type of lease is 10%. The present value of
the minimum lease payments at the inception of the lease (before the first payment) was 1267680. The lease is being accounted for
as a finance lease by Sunland. On its December 31, 2023 statement of financial position, Sunland should report a lease liability of207632.
756048.963680.
96368.

Added by Patricia G.

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