Question

At January 1, 2019, Alpha leased restaurant equipment from Spring Corporation under a six-year lease agreement in a finance lease. The lease agreement specifies annual payments of $20,000 beginning January 1, 2019, the beginning of the lease, and at each December 31 thereafter through 2023. The equipment was acquired recently by Spring at a cost of $120,000 and was expected to have a useful life of eight years with no salvage value at the end of its life. Spring seeks a 5% return on its lease investments. The total decrease in earnings (pretax) in Alpha December 31, 2019, income statement would be:

Answer 1

Under 6 years ago in 2019 leases out