Question
ABCLtd has leased a machine on the following terms: Date of entering lease 1 July 2019 Duration of lease 5 years Life of asset 6
ABCLtd has leased a machine on the following terms:
Date of entering lease 1 July 2019
Duration of lease 5 years
Life of asset 6 years
Unguaranteed residual value $40,000
Lease payments inception (at the start) $60,000
Annual payments (5) $65,000
Implied rate 11.0 %
Required: Determine the Fair Value (rounded off) of the leased asset.
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
4th edition
78025524, 978-0078025525
