Index Laboratories Is Considering Leasing a Thermoplastic Molder

question 31

Multiple Choice

Index Laboratories is considering leasing a thermoplastic molder. The lease would require 7 beginning-of-the-year payments of $122,000 each. If Index capitalizes this lease for financial reporting purposes at a 12% rate, what asset amount will be reported initially on its balance sheet?

• A) $623,625
• B) $969,046
• C) $556,808
• D) $854,000

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