Lasch Co. recorded a right-of-use asset of ... I. Lasch Co. recorded a right-of-use asset of $200,000 in a 10-year operating lease. Payments of $32,550 are made annually at the end of each year. The interest rate charged by the lessor was 10%. The balance in the right-of-use asset after the first year will be:A) $180,000. B) $187,450C) $188,450. D) $200,000.

Question

Aleah Blanchard

Business

3 October, 05:27

Lasch Co. recorded a right-of-use asset of ... I. Lasch Co. recorded a right-of-use asset of $200,000 in a 10-year operating lease. Payments of $32,550 are made annually at the end of each year. The interest rate charged by the lessor was 10%. The balance in the right-of-use asset after the first year will be:A) $180,000. B) $187,450C) $188,450. D) $200,000.

+2

Answers (1)

Know the Answer?

Bridget Davenport · Answer 1

187, 450.00

Explanation:

Cost of the asset : $ 200,000.00

Interest rate at 10 %

Payment per year = 32,550.00

First year total amount due = 10% plus asset cost

= ($200,000x 10/100) = 200,000

=$20,000+200 000

=$220,000.00

After deduction = $220,000 - 32, 550

=$ 187, 450.00