Business
Business, 29.10.2019 02:31, sweetjosie

Pisa, inc. leased equipment from tower company under a four-year lease requiring equal annual payments of $172,076, with the first payment due at lease inception. the lease does not transfer ownership, nor is there a bargain purchase. pisa’s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by pisa) is 8%. assuming that this lease is properly classified as a capital lease, what is the amount of principal reduction recorded when the second lease payment is made at the beginning of year 2? a. $172,076b. $122,833c. $126,480d. $136,599

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