Calix Co. manufactures equipment for sale or lease. The equipment has a fair value or selling price of $1,200,000 and it costs $900,000. The equipment has no residual value at the end of the lease and leases do not contain bargain purchase options. Calix wishes to earn 12% interest on a four-year lease of this equipment. What is the amount of the annual lease payment to be made at the beginning of each year as calculated by Calix? A. $225,000 B. $300,000 C. $352,752 D. $264,564

3. Which of the following is true in regards to the reassessment of the lease term? A. If the lessee reassesses the lease term, it must remeasure the lease liability as the present value of the remaining payments. B. If the lessee reassesses the lease term, the discount rate for the new term must be the interest rate used at the beginning of the lease. C. The lessee is not permitted to reassess its initial determination of the lease term or discount rate. D. The lesser Canary assess its initial determination of the lease term if there is a triggering event.

Roarie Enterprises leased restaurant equipment from Omega leasing. Omega earns interest under such arrangements at a 10% annual rate. The lease term is seven months with monthly payments of $30,000 due at the end of each month. Roarie Enterprises elects the short-term lease option. What is the next effect of the lease on Roarie Enterprisess earnings during the seven-month term (ignore taxes)? A. An initial expense of $160,000. B. An expense of $30,000 initially and $30,000 at the end of 6 months. C. An expense of $30,000 at the end of each after 7 months. D. Total expense of $210,000 allocated between amortization expense and interest expense.