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Exercise 21A-5 a-c Shamrock Leasing Company signs an agreement on January 1, 2017, to lease equipment to Cole Company. The following information relates to this
Exercise 21A-5 a-c Shamrock Leasing Company signs an agreement on January 1, 2017, to lease equipment to Cole Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years 2. The cost of the asset to the lessor is $451,000. The fair value of the asset at January 1, 2017, is $451,000 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $24,225, none of which is guaranteed 4. The agreement requires equal annual rental payments, beginning on January 1, 2017. 5 Collectibility of the lease payments by Shamrock is probable. Click here to view the factor table Assuming the lessor desires a 7% rate of return on its investment, calculate the amount of the annual rental payment required. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and the final answer to 0 decimal places e.g. 5,275.) Amount of the annual rental payment s
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