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    Time Value of Money: Leases, Liabilities and Bonds

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    Lisa's Boutique is renting prime store space at the Regional Mall and just signed a five-year lease effective January 1 of the current year with the following terms:

    Refundable security deposit $1,500
    Monthly lease payments $3,000
    Lease bonus due at signing $18,000

    Lisa has had to make significant renovations to the store prior to moving in. The renovations cost $50,000 and have a useful life of 8 years. Lisaâ??s Boutique will record occupancy expense for the current year ended December 31 of:
    - $51,100
    - $49,600
    - $49,900
    - $45,850

    © BrainMass Inc. brainmass.com March 4, 2021, 10:36 pm ad1c9bdddf
    https://brainmass.com/business/leasing/time-value-money-leases-liabilities-bonds-345049

    Solution Preview

    Lease Payments = 3000*12 = 36,000

    Renovation Cost = 50000/5 ...

    Solution Summary

    The solution computes occupancy expense for Lisa Boutique based on five-year lease.

    $2.49

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