Leewin Brokerage Leewin Brokerage Enters into a Lease Agreement with Bumble Motors

question 103

Essay

Leewin Brokerage
Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a fair value of $75,000 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 $10,000 on December 20, 2018. In addition, the lease agreement stipulates annual payments of $10,000, 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 $2,000.
-Based on the above information, calculate the right-of-use asset on January 1, 2019.

---

Definitions:

Fluid Pressure

The pressure exerted by a fluid at any given point within the fluid, dependent on the depth and density of the fluid.

Eyeball

The organ of vision in the human body, spherical in shape, which captures light and processes it into signals sent to the brain.

Glaucoma

A group of eye conditions that can cause blindness by damaging the optic nerve, usually due to high pressure in the eye.

Liver Cirrhosis

A late stage of scarring (fibrosis) of the liver caused by many forms of liver diseases and conditions, such as hepatitis and chronic alcoholism.