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#9 Bond Corporation purchased a machine on January 1, 2016 for $1,500,000 with an expected life of 10 years for the date of purchase. There
#9 Bond Corporation purchased a machine on January 1, 2016 for $1,500,000 with an expected life of 10 years for the date of purchase. There is no residual value, and it is to be depreciated on a straight-line basis. On January 1, 2016, Raza Company leased the machine from Bond Corp for 3 years at a monthly rate of $32,000 In addition, Raza paid a lease bonus of $75,000. 1) What is the amount of income on this operating lease, should Bond Corp (lessor) report for the year ended December 31, 2016? 2) What is the amount of expense on this operating lease, should Raza Corp (lessee) report for the year ended December 31, 2016
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