Leewin Brokerage Enters into a Lease Agreement with Bumble Motors

question 32

Multiple Choice

Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a fair value of $77,000 under a 5-year lease on December 20, 2018. The lease commences on January 1, 2019, and Leewin will return the automobile to Bumble on December 31, 2023. The automobile has an estimated useful life of 7 years. Leewin made a lease payment of $10,900 on December 20, 2018. In addition, the lease agreement stipulates annual payments of $10,900, due on January 1 of 2019, 2020, 2021, 2022, and 2023. The implicit rate of the lease is 7% and is known by Leewin. There is no purchase option, no lease incentives, no residual value guarantees, and no transfer of ownership. Leewin incurs initial direct costs of $1,200. Assuming that this is classified as an operating lease, what is the amount of the lease liability on January 1, 2019 before the lease payment?

• A) $47,821
• B) $45,892
• C) $44,692
• D) $64,200

---

Definitions:

Self-Determination

The process by which a person controls their own life.

Closing Phase Goals

Objectives set for the conclusion of a therapy or a project, aiming to ensure that ending processes are conducted smoothly and effectively.

Social Interest

A concept in psychology referring to a person's inclination towards being cooperative, contributing to the welfare of others, and social belonging.

Basic Mistakes

Fundamental errors in thinking or behavior that contribute to psychological difficulties, as per Adlerian psychology.