Nice Manufacturing Company Nice Manufacturing Company Leased a Piece of Nonspecialized Equipment for Nonspecialized

question 17

Essay

Nice Manufacturing Company
Nice Manufacturing Company leased a piece of nonspecialized equipment for use in its operations from Righteous Leasing on January 1, 2019. The 10-year lease requires lease payments of $8,000, beginning on January 1, 2019, and at each December 31 thereafter through 2027. The equipment is estimated to have a 10-year life, is depreciated on the straight-line basis and will have a $5,000 residual value at the end of the lease term on December 31, 2028, which is guaranteed by Nice. Nice's incremental borrowing rate is 9%. Initial direct costs of $2,000 are incurred by the lessee on January 1, 2019. Righteous Leasing acquired the asset just prior to the lease term at a cost of $27,000. Collection of all lease payments is reasonably assured.
-What is the amount of the lease liability recorded by Nice at the lease's commencement?

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Definitions:

Customer Demographics

The statistical characteristics of a business's customers, including age, gender, income level, education, and other factors useful for market segmentation and targeting.

Psychographics

Psychographics pertain to the study of consumer behavior based on psychological traits, lifestyle choices, and personal values to inform marketing strategies.

Market

A place where people can sell goods and services (the supply) to people who wish to buy those goods and services (the demand).

Customer Mapping Process

A strategic approach to understanding the journey of the customer with a business, from initial awareness to post-purchase interactions, aiming to improve customer experience.