On January 2,2014,Commack Corporation Entered into a 10-Year Noncancelable Lease

question 60

Multiple Choice

On January 2,2014,Commack Corporation entered into a 10-year noncancelable lease requiring year-end payments of $60,000.The incremental borrowing rate for Commack is 10%.The lessor's implicit rate (which is known by Commack) is 12%.The lease contains no transfer of title or bargain purchase option provisions.The leased property has an estimated economic life of 12 years.At what amount should the lease be capitalized by Commack?

• A) $0
• B) $339,012
• C) $368,676
• D) $600,000

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