CALCULATOR FIRL SCREEN PRINTER VERSION BACK Problem 120 (Part Level Submission) Merando Corporation leases a building to Fernetti, Inc. on January 1, 2017. The following facts pertain to the lease agreement. 1. The lease term is 10 years with equal annual rental payments of $51,800 at the end of each year 2. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. The building has a fair value of $514,800, a book value to Merando of $327,800, and a useful life of 15 years At the end of the lease term, Merando and Fernetti expect the residual value of the building to be $187,000, and this amount is guaranteed by Baden, Inc, a third party. 5. Merando wants to earn a 5% return on the lease, and collectability of the payments is probable. Describe the nature of this lease to both Merando and Fernetti INK TO TEXT ook, init) CALCULATOR FIRL SCREEN PRINTER VERSION BACK Problem 120 (Part Level Submission) Merando Corporation leases a building to Fernetti, Inc. on January 1, 2017. The following facts pertain to the lease agreement. 1. The lease term is 10 years with equal annual rental payments of $51,800 at the end of each year 2. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. The building has a fair value of $514,800, a book value to Merando of $327,800, and a useful life of 15 years At the end of the lease term, Merando and Fernetti expect the residual value of the building to be $187,000, and this amount is guaranteed by Baden, Inc, a third party. 5. Merando wants to earn a 5% return on the lease, and collectability of the payments is probable. Describe the nature of this lease to both Merando and Fernetti INK TO TEXT ook, init)