Accounting MCQ
Accounting Chapter 15
Grant Industries leased exercise equipment to Silver Gyms on July 1, 2016. Grant recorded the lease as a sales-type lease at $810,000, the present value of minimum lease payments discounted at 10%. The lease called for ten annual lease payments of $120,000 due at the beginning of each year. The first payment was received on July 1, 2016. Grant had manufactured the equipment at a cost of $750,000. The total increase in earnings (pretax) on Grant's 2016 income statement would be:
Grant Industries leased exercise equipment to Silver Gyms on July 1, 2016. Grant recorded the lease as a sales-type lease at $810,000, the present value of minimum lease payments discounted at 10%. The lease called for ten annual lease payments of $120,000 due at the beginning of each year. The first payment was received on July 1, 2016. Grant had manufactured the equipment at a cost of $750,000. The total increase in earnings (pretax) on Grant's 2016 income statement would be:
Grant Industries leased exercise equipment to Silver Gyms on July 1, 2016. Grant recorded the lease as a sales-type lease at $810,000, the present value of minimum lease payments discounted at 10%. The lease called for ten annual lease payments of $120,000 due at the beginning of each year. The first payment was received on July 1, 2016. Grant had manufactured the equipment at a cost of $750,000. The total increase in earnings (pretax) on Grant's 2016 income statement would be:
A) $0
B) $93,000
C) $94,500
D) $100,500
Answer: C
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