Green’s auditors did not even look at this lease last year. However, at 12/31/09 its new auditors looked closely, and they told Green that this should have been recorded as a capital lease, because the purchase option was a bargain.
Prepare the entries that fix this error. Green normally depreciates assets like printing presses over five years. The 2008 books have been closed, but the 2009 books are still open.
Dear Student, This seems to be a new requirement. By default, I... View the full answer