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Frisco Corp. (lessee) entered into a 7-year finance lease with Bovine Equipment (lessor) on January 1, Year 2. Lease payments of $47,500 are due annually
Frisco Corp. (lessee) entered into a 7-year finance lease with Bovine Equipment (lessor) on January 1, Year 2. Lease payments of $47,500 are due annually beginning on December 31, Year 2. The interest rate implicit in the lease of 8% is known to Frisco. Frisco's incremental borrowing rate is 5%. The fair value of the leased asset on the date of the lease is $315,000. The useful life of the equipment is 8 years. What amount should Frisco Corp. record for the right-of-use asset on its balance sheet on the lease commencement date? Enter whole numbers only. Do not enter commas or dollar signs. Type your response The present value of an ordinary annuity at 5% is The present value of an ordinary annuity at 8% is 7 YEARS 8 YEARS 5.7864 6.4632 5.2064 5.7466 The present value of an annuity due at 5% is The present value of an annuity due at 8% is 6.0757 5.6229 6.7864 6.2064
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