Question
Kingbird Leasing Company signs a lease agreement on January 1, 2020, to lease warehouse equipment to Blossom Company. The term of the non-cancelable lease
Kingbird Leasing Company signs a lease agreement on January 1, 2020, to lease warehouse equipment to Blossom Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. 2. Blossom has the option to purchase the equipment for $19.700 upon termination of the lease. It is not reasonably certain that Blossom will exercise this option. The equipment has a cost of $167,000 and fair value of $192,400 to Kingbird Leasing. The useful economic life is 2 years, with a residual value of $19,700. 3. Kingbird Leasing desires to earn a return of 6% on its investment. 4. Collectibility of the payments by Kingbird Leasing is probable. .C Click here to view factor tables (a) 4:240 2 7 41 Light.cam O
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