For the Following Lease, Determine the Amount the ROU Asset

question 19

Multiple Choice

For the following lease, determine the amount the ROU asset will be initially measured at.
$\begin{array}{|l|l|}\hline \text { Annual payment (due at end of year) } & \$ 23,000 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental borrowing rate } & 10 \% \\\hline \text { Implicit rate (readily determinable by lessee) } & 8 \% \\\hline \text { Unguaranteed residual value } & \mathrm{NA} \\\hline \text { Guaranteed residual value } & 25,000 \\\hline \text { Expected payout under guarantee } & 0 \\\hline\end{array}$

• A)91,832
• B)102,711
• C)105,444
• D)108,846

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