Patrol,Inc

question 43

Multiple Choice

Patrol,Inc. ,leased a machine from Ravel Company.The lease term was for a five-year period beginning January 1,2014.Equal annual lease payments of $3,000 are due on December 31 of each year.The implicit rate of the lease is 10% and is known to Patrol.Patrol has properly applied the lease capitalization criteria and as a result,accounts for the lease as a capital lease.The first payment under the lease was made on December 31,2014 as scheduled. How much should Patrol classify as the current portion of the lease liability at December 31,2014?

• A) $2,049
• B) $7,460
• C) $3,000
• D) $9,509

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Definitions:

World Price

The global market price of a good or service, influenced by worldwide demand and supply.

Free Trade

Free trade is an economic policy that allows goods and services to be bought and sold across international borders with little to no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

Domestic Supply

The total amount of goods and services produced within a country's borders available for consumption or export.

Domestic Demand

The sum of all requests for goods and services in a country.