Heavy Mechanical Complex (HMC) acquired a giant lathe machine ...

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Question 1

Heavy Mechanical Complex (HMC) acquired a giant lathe machine under a capital lease agreement. HMC pays the lessor $2400 at the beginning of every 3 months for 5 years. If HMC can obtain 5-year financing at 10% compounding quarterly, what long-term lease liability will HMC initially record?
◦ $61 307
◦ $37 414
◦ $48 000
◦ $38 349
◦ $62 840

Question 2

Heavy Mechanical Complex (HMC) acquired a giant lathe machine under a capital lease agreement. HMC pays the lessor $2400 at the beginning of every 3 months for 5 years. If HMC can obtain 5-year financing at 10% compounding quarterly, what liability will be reported 2 years later?
◦ $33 109
◦ $25 234
◦ $37 414
◦ $38 349
◦ $33 937

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