On December 31, 2016, Kuhn Corporation Leased a Plane from Bell

question 32

Multiple Choice

On December 31, 2016, Kuhn Corporation leased a plane from Bell Company for an eight-year period expiring December 30, 2024.Equal annual payments of $150,000 are due on December 31 of each year, beginning with December 31, 2016.The lease is properly classified as a finance lease on Kuhn's books.The present value at December 31, 2016 of the eight lease payments over the lease term discounted at 10% is $880,264.Assuming the first payment is made on time, the amount that should be reported by Kuhn Corporation as the lease liability on its December 31, 2016 statement of financial position is

• A)$880,264.
• B)$818,290.
• C)$792,238.
• D)$730,264.

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