Remeasuring a Lease Liability Universal Inc. signed a contract to lease equipment for a 4-year term on January 1, 2020,

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Remeasuring A Lease Liability Universal Inc Signed A Contract To Lease Equipment For A 4 Year Term On January 1 2020 1 (58.62 KiB) Viewed 20 times

Remeasuring a Lease Liability Universal Inc. signed a contract to lease equipment for a 4-year term on January 1, 2020, for $8,000 annually beginning immediately. The lease included a purchase option at the end of the lease for $3,200, that at the commencement of the lease, Universal did not believe would exercise. However, on December 31, 2021, two years later, circumstances had changed causing Universal to now reasonably expect to exercise the option. Universal's incremental borrowing rate changes from 5% at the lease commencement date to 7% currently. The incremental borrowing rate at lease commencement did not reflect the purchase option. On December 31, 2021, the lease liability and right-of-use asset had balances of $14,875 and $14,893, respectively. What is the adjusted lease liability on December 31, 2021? Note: Round your answer to the nearest whole dollar. $ 15,000