Brooke Distributing Leased a Machine for a Period of Eight

question 52

Multiple Choice

Brooke Distributing leased a machine for a period of eight years,contracting to pay $200,000 at the beginning of the lease term on December 31,2014,and $200,000 annually on December 31 for each of the next seven years.The present value of the eight rent payments over the lease term,appropriately discounted at 10 percent,is $1,174,000.On its December 31,2015,balance sheet,Brooke should report a liability under capital lease of

• A) $871,400.
• B) $876,600.
• C) $974,000.
• D) $1,091,400.

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