Albert Corp., reporting under ASPE, is a manufacturer of truck trailers. On January 1, 2020, it leases ten trailers to Einstein Inc., under a six-year non-cancellable lease agreement. The terms of the lease include equal annual payments due at the beginning of each year to provide Albert with an 8% return on its investment. This implicit rate is not disclosed and so Einstein uses a discount rate of 9%. The trailers will be returned to the lessor at the end of the lease when they are expected to be sold for $3,500 each. The residual values of the trailers are not guaranteed by the lessee. The fair value of each trailer is $50,000 at the beginning of the lease. The cost of each trailer to Albert Corp. is $45,000. The trailers have an expected useful life of nine years. Collectibility of the lease payments is reasonably assured, and any non-reimbursable costs under the lease that are likely to be incurred by Albert can be reasonably estimated.

[14] The minimum lease instalment determined by the lessor would be (Answer to the nearest penny)

Select one:

a.

$97,988.72

b.

$103,386.64

c.

$106,807.64

d.

$77,500

e.

None of the above but some other amount