Question

17

Answer 1

The balance of lease liability on December 31, 2019, is equal to €31,592.39.

Option A is the correct answer.

What is a lease?

A lease is a contract where the owner of the asset permits the other party to utilize the asset for a specified period of time. The owner receives some consideration for that use.

Given values:

Yearly rental payment:  € 9,538.39

PV annuity factor of 8% at 4 years: 3.31213

Computation of lease liability balance:

$\rm\ Balance \rm\ of \rm\ Lease \rm\ Liability= \rm\ Yearly \rm\ Rentals \times\ \rm\ PV \rm\ Annuity \rm\ factor\\\rm\ Balance \rm\ of \rm\ Lease \rm\ Liability=\ 9,538.39 \times\ 3.31213\\\rm\ Balance \rm\ of \rm\ Lease \rm\ Liability=31,592.39$

Therefore, on December 31, 2019, the amount of lease liability comes our to be € 31,592.39.

Learn more about the lease rentals in the related link:

brainly.com/question/23095692

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