archived_user
New member
- Jun 18, 2026
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Hello everyone,
I bumped into the following exercise and I would really appreciate some insights how to solve this type of exercise:
_________________________________________________
X plans to lease item Y: it’s a 10-year capital lease with annual payments of USD 2,400 plus a guarantee of residual value of USD 4,000 at the end of the lease. The present value of the lease discounted at the appropriate interest rate of 9% is USD 17,000. X will use the straight-line depreciation method. In the first year, the reported lease expense will be:
a. 3,230 USD
b. 1,700 USD
c. 2,830 USD
d. 2,400 USD
______________________________________
(correct answer is c).
Thanks a bunch!
I bumped into the following exercise and I would really appreciate some insights how to solve this type of exercise:
_________________________________________________
X plans to lease item Y: it’s a 10-year capital lease with annual payments of USD 2,400 plus a guarantee of residual value of USD 4,000 at the end of the lease. The present value of the lease discounted at the appropriate interest rate of 9% is USD 17,000. X will use the straight-line depreciation method. In the first year, the reported lease expense will be:
a. 3,230 USD
b. 1,700 USD
c. 2,830 USD
d. 2,400 USD
______________________________________
(correct answer is c).
Thanks a bunch!