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GLEM III (15 points) January 1, 2023, Lessee entered into a 6-year lease for equipment. The lease qquires the payment on January 1st of each
GLEM III (15 points) January 1, 2023, Lessee entered into a 6-year lease for equipment. The lease qquires the payment on January 1st of each year of $20,000 per year. At the end of the ease term, Lessee has the option of purchasing the equipment for $50,000. It is reasonable assured that the purchase option will be exercised since the $50,000 purchase option price is a fantastic bargain purchase option. The lessee's incremental borrowing rate is 10% (and it does not know the lessor's implicit rate.) The equipment has a useful life of 8 years and no salvage value. Lessee uses the straight- line method to depreciate all of its depreciable assets. The following present value factors are provided to assist you to calculate the asset and liability to be recorded on lessee's books
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