For the Following Lease, Determine the Amount the ROU Asset

question 29

Multiple Choice

For the following lease, determine the amount the ROU asset will be initially measured at.
$\begin{array}{|l|l|}\hline \text { Annual payment (due at end of year) } & \$ 23,150 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental borrowing rate } & 8 \% \\\hline \text { Implicit rate (readily determinable by lessee) } & 6 \% \\\hline \text { Guaranteed residual value } & 10,000 \\\hline \text { Expected payout under guarantee } & 10,000 \\\hline\end{array}$

• A)92,431
• B)97,516
• C)99,237
• D)104,989

---

Definitions:

Avoidance Motivation

A type of behavior aimed at avoiding negative outcomes, failures, or punishments, as opposed to seeking positive outcomes.

Hierarchy Of Needs

A motivational theory in psychology proposed by Abraham Maslow, depicting a five-tier model of human needs, from basic (physiological) to higher-order (self-actualization) needs.

Sequential

Occurring or following in a logical order or sequence.

Motives

Internal processes that energize, direct, and sustain behavior towards fulfilling a need or achieving a goal.