Cullumber Company, a machinery dealer, leased a machine to Ivanhoe Corporation on January 1, 2025. The lease is for an 8-year period and requires equal annual payments of $28,300 at the beginning of each year. The first payment is received on January 1, 2025. Cullumber had purchased the machine during 2024 for $160,000. Collectibility of lease payments by Cullumber is probable. Cullumber set the annual rental to ensure a 5% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Cullumber at the termination of the lease. Assume that Ivanhoe Corporation does not know the rate implicit in the lease used by Cullumber, and Ivanhoe's incremental borrowing rate is 7%. In addition, assume that Ivanhoe incurs initial direct costs of $12,000. Click here to view factor tables. (a) Your answer is incorrect. Compute the amount of the lease liability and right-of-use asset for Ivanhoe. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Lease liability Right-of-use asset $ $

Cullumber Company, a machinery dealer, leased a machine to Ivanhoe Corporation on January 1, 2025, The lease is for an 8 -year period and requires equal annual payments of $28,300 at the beginning of each year. The first payment is received on January 1,2025. Cullumber had purchased the machine during 2024 for $160,000. Collectibility of lease payments by Cullumber is probable. Cullumber set the annual rental to ensure a 5% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Cullumber at the termination of the lease. Assume that Ivanhoe Corporation does not know the rate implicit in the lease used by Cullumber, and Ivanhoe's incremental borrowing rate is 7%. In addition, assume that Ivanhoe incurs initial direct costs of $12,000. Click here to view factor tables: (a) Your answer is incorrect Compute the amount of the lease liability and right-of-use asset for Ivanhoe. (For colculation purposes, use 5 decimal ploces as disployed in the foctor table provided and round final answers to 0 decimal places es. 5,275.) Lease liability Right-of-use asset 5