Business, 04.05.2021 17:30, daeshawnc14

On January 2, 2020, Wayne Inc. signed an eight-year lease for office space for $24,000 annually, with the first payment due immediately. Wayne has the option to renew the lease for an additional four-year period on or before January 2, 2028, at market lease rates at the time of renewal. Wayne intends to evaluate rental options at the time of the option to renew. The remaining economic life of the office is 30 years. Wayne Inc. is not aware of the implicit rate of the lease but has an incremental borrowing rate of 7%. Wayne Inc. paid $1,000 on January 2, 2020, for initial direct lease costs. Required:
a. How would Wayne Inc. classify the lease?
b. Prepare an amortization schedule of the lease liability.

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On January 2, 2020, Wayne Inc. signed an eight-year lease for office space for $24,000 annually, wit...