For the Following Lease, Determine the Amount the ROU Asset

question 14

Multiple Choice

For the following lease, determine the amount the ROU asset will be initially measured at. $\begin{array}{|l|l|}\hline \text { Annual payment (due at end of year) } & \$ 23,104 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental borrowing rate } & 10 \% \\\hline \text { Implicit rate (not readily determinable by lessee) } & 8 \% \\\hline \text { Unguaranteed residual value } & \text { NA } \\\hline \text { Guaranteed residual value } & 20,000 \\\hline \text { Expected payout under guarantee } & 20,000 \\\hline\end{array}$

• A)75,164
• B)78,636
• C)100,001
• D)105,859