Answer:
$1,872,000
Explanation:
The amount of operating lease obligation that needs to be reported on the balance sheet on December 31, 2018 is the total lease payment in next following years
= $220,000 + $180,000 + $240,000 + $210,000 + $190,000 + $832,000
= $1,872,000
If you want to know the payment lease in 2024 - 2027, we do as following:
The average of prior years between 2019 to 2023
= ($220,000 + $180,000 + $240,000 + $210,000 + $190,000)/ 5 years
= $208,000
And for years after 2023, the annual lease payment should be treated as the average of prior years between 2019 to 2023, then lease payment in 2024 - 2027 is $208,000 annually. Total $832,000 in 4 years.
