Use the Information Below to Answer the Following Questions

question 97

Multiple Choice

Use the information below to answer the following questions.

On December 31, 2017, Reagan Inc. signed a lease with Silver Leasing Co. for some equipment having a seven-year useful life. The lease payments are made by Reagan annually, beginning at signing date. Title does not transfer to the lessee, so the equipment will be returned to the lessor on December 31, 2023. There is no purchase option, and Reagan guarantees a residual value to the lessor on termination of the lease.

Reagan's lease amortization schedule appears below:


-What is the balance of the lease liability on Reagan's December 31, 2019, balance sheet (after the third lease payment is made) ?

• A) $280,531.
• B) $190,530.
• C) $266,280.
• D) $356,280.

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Definitions:

Just Compensation

The fair payment required to be made to an individual when their property is taken for public use, as guaranteed by the Constitution.

Zoning Rights

Legal permissions dictating the use of land in specific areas according to designated categories such as residential, commercial, or industrial.

Real Property

Land and anything permanently attached to it, such as buildings or trees.

Physical Property

An attribute of a physical system or body; commonly refers to properties like mass, volume, and density that can be observed and measured without changing the substance itself.