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On 1 January, the Harglo Construction Company Leased a Bulldozer

Question 59

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On 1 January, the Harglo Construction Company leased a bulldozer from ASIS Sales Corporation. The lease meets the criteria for classification as a finance (capital) lease and requires Harglo to make annual payments of $30 000 at the end of each of the next 10 years with the first payment due at the end of each year on 31 December. The present value of the lease payments is $200 000 based on an interest rate of 8%.
How would the lessee record:
On 1 January, the Harglo Construction Company leased a bulldozer from ASIS Sales Corporation. The lease meets the criteria for classification as a finance (capital) lease and requires Harglo to make annual payments of $30 000 at the end of each of the next 10 years with the first payment due at the end of each year on 31 December. The present value of the lease payments is $200 000 based on an interest rate of 8%. How would the lessee record:

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