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On January 1, Year 1, Dayden Company as lessee signed a five-year noncancelable equipment lease with...

On January 1, Year 1, Dayden Company as lessee signed a five-year noncancelable equipment lease with annual payments of $100,000 beginning December 31, Year 1. Dayden Company treated this transaction as a capital lease. The five lease payments have a present value of $379,000 at January 1, Year 1, based on interest of 10%. What amount should Dayden Company report as interest expense for the year ended December 31, Year 1?

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Expert Solution

Present value of lease payments 379000
X Interest rate 10%
Interest expense for the year ended
December 31, Year 1		 37900

ekkarill92 answered 2 years ago
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