On December 30, 2019, Drew Company leased equipment under a finance lease for a period of 10 years. Drew contracted to pay $90,000 annual rent on December 31, 2019, and on December 31 of each of the next nine years. The finance lease liability was appropriately recorded at $608,312 on December 30, 2019, before the first payment. The leased equipment has a useful life of 12 years, and the interest rate implicit in the lease is 10%, known by Drew. Drew uses the straight-line method for depreciating all equipment. In recording the December 31, 2021, payment, Drew should reduce its lease liability by:
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On December 30, 2019, Drew Company leased equipment under a finance lease for a period of 10 years....
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