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*Exercise 21-8 The following facts pertain to a noncancelable lease agreement between Grouper Leasing Company and Monty Company, a lessee Inception date Annual lease payment
*Exercise 21-8 The following facts pertain to a noncancelable lease agreement between Grouper Leasing Company and Monty Company, a lessee Inception date Annual lease payment due at the beginning May 1, 2017 of $23,007.91 each year, beginning with May 1, 2017 Bargain-purchase option price at end of lease $4,400 term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2017 Lessor's implicit rate Lessee's incremental borrowing rate years 10 years $68,000 $97,000 11% 11% The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs. The expected residual value of the equipment at the end of 5 (10) years is $12,000 ($0)
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