On December 31, 2011, Lang Corporation Leased a Ship from Fort

question 61

Multiple Choice

On December 31, 2011, Lang Corporation leased a ship from Fort Company for an eight-year period expiring December 30, 2019.Equal annual payments of $200,000 are due on December 31 of each year, beginning with December 31, 2011.The lease is properly classified as a finance lease on Lang 's books.The present value at December 31, 2011 of the eight lease payments over the lease term discounted at 10% is $1,173,685.Assuming all payments are made on time, the amount that should be reported by Lang Corporation as the total lease liability on its December 31, 2012 statement of financial position.

• A)$1,091,054.
• B)$1,000,159.
• C)$871,054.
• D)$1,200,000.

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Definitions:

Personal Property

Personal property refers to movable property that is not fixed to one location and can include items like vehicles, furniture, and electronics.

Secures Payment

Refers to any method or measure taken to ensure that a debt or financial obligation will be paid, such as collateral or a guarantee.

UCC

The Uniform Commercial Code (UCC) is a comprehensive set of laws governing all commercial transactions in the United States.

Secured Transactions

involve agreements in which the borrower provides the lender a security interest in personal property as collateral for a loan.