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Exercise 15-4 Direct financing lease; lessor [LO15-5] Learning Objective: 15-05 Describe and demonstrate how both the lessee and lessor account for a capital lease. Edison
Exercise 15-4 Direct financing lease; lessor [LO15-5]
Learning Objective: 15-05 Describe and demonstrate how both the lessee and lessor account for a capital lease.
Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2016 Edison purchased the equipment from International Machines at a cost of $123,288. (FV of $1, PV of S1. FVA of $1 PVA of S1 FVAD of $1 and PVAD of S1) (Use appropriate factor(s) from the tables provided.) Related Information: Lease term Quarterly rental payments $16,500 at the beginning of each period Economic life of asset 2 years Fair value of asset Implicit interest rate (Also lessee's incremental borrowing rate) 2 years (8 quarterly periods) $123,288 8%Step by Step Solution
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