Beaudoin Haulage has signed a five-year lease with GMAC on a new dump truck. Lease payments of $4500 are made at the beginning of each month. To purchase the truck, Beaudoin would have had to borrow funds at 8.7% compounded annually. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
a. What initial liability should Beaudoin report on its balance sheet?
$
220000.25
b. How much will the liability be reduced during the first year of the lease?
$
1 answer