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HELPPP ASAPPOP On January 2, 2021, Hanson Leasing Company leases equipment to Foley Co. with 5 equal annual payments of $240,000 each, payable beginning January
HELPPP ASAPPOP
On January 2, 2021, Hanson Leasing Company leases equipment to Foley Co. with 5 equal annual payments of $240,000 each, payable beginning January 2, 2021. Foley Co. agrees to guarantee the $150,000 residual value of the asset at the end of the lease term. The expected value of the residual is $0. Foley's incremental borrowing rate is 10%, however it knows that Hanson's implicit interest rate is 8%. The journal entry Hanson makes at January 2, 2021 includes a debit to right-of-use asset for? PV Annuity Due PV Ordinary Annuity 4.31213 PV Single Sum .68508 3.99271 8%, 5 periods 10%, 5 periods 4.16986 3.79079 .62092 897,674 O 1,034,910 O 1,061,013 O1,137,673 Step by Step Solution
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