Question
Exercise 21-6 Oriole Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2017. The lease is for an 8-year period and
Exercise 21-6
Oriole Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2017. The lease is for an 8-year period and requires equal annual payments of $34,933 at the beginning of each year. The first payment is received on January 1, 2017. Oriole had purchased the machine during 2016 for $172,000. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by Oriole. Oriole set the annual rental to ensure an 10% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Oriole at the termination of the lease.
Exercise 21-6 Driale Company, a machinery dealer, Icased a machine to Dexter Corparation on January 1, 2017. The lease i for an 8-year periad and requires equalaual payments of $34,933 a the beginning af each year. The first payment is received on January 1, 2017. Driale had purchased the machine during 2a16 or $172 OD allectibility a case pa m?nts is reasonably predictable and no impartant uncertainties su nur d the amount o casts at to be incurred by anole no e set the annual rental to ensure an 1 e rate o atum. The machine has an aconamic life of 10 years with na residual value and reverts to Oriole at the termination af the lease. rate of ratu factor tables lick here ro vew Compute the amount of the lease receivable. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g.58,971.) The amount of the lease receivableStep by Step Solution
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