ACC 309 Milestone Two.docx - ACC 309 Milestone Two 1 ACC...

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ACC 309 Milestone Two1ACC 309 Milestone Two: Peyton ApprovedYaridis RodriguezSouthern New Hampshire UniversityApril 5, 2020
ACC 309 Milestone Two2Milestone Two: Peyton ApprovedPeyton Approved has developed tremendous growth in the past three years, they are nowwell-known for their bakery chain for pet products. They have rented six ovens, for six years andat the end of the capital lease they will be owned by Peyton Approved. They have alsoestablished a postretirement benefit policy for its employees.Capital LeaseCapital leases are contracts that allow the renter to have temporary use of a specific asset.Capital leases have economic characteristics of an asset ownership for accounting purposes only.Peyton Approved has decided to choose the capital lease option for some of its equipment. Theyhave leased six new ovens, for six years, at an interest rate of five percent and at the end of sixyears they will be owned by Peyton Approved. It will be recorded as an asset verse expenditure.

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