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Leases The Corp has signed a 5-year lease for new production equipment. The lease calls for annual payments at the start of each year, beginning
Leases
The Corp has signed a 5-year lease for new production equipment. The lease calls for annual payments at the start of each year, beginning on the date of the signing as the first payment, of $74,000. The useful life of the machine is 6 years and The Corp will retain title at the end of the lease. The lessor structures leases with an implicit interest rate of 10%. There is no residual value at the end of the lease. How much interest expense will The Corp recognize over the life of the lease?
A$ 37,000
B$ 185,000
C$ 61,430
D$ 153,500
E$ 44,400
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