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Marin Fashion Company enters into a lease arrangement with Highpoint Leasing for 5 years. Marin agrees to pay 6% of its net sales as a
Marin Fashion Company enters into a lease arrangement with Highpoint Leasing for 5 years. Marin agrees to pay 6% of its net sales as a variable lease payment. Marin does not pay any fixed payments. Marin is a highly successful company that has achieved over $1,050,000 in net sales over the last 7 years. Both Marin and Highpoint forecast that net sales will be a much greater amount than $1,050,000 in subsequent years. As a result, it is highly certain that Marin will make payments of at least $63,000($1,050,0000.06) each year. What is the lease payment amount Marin should use to record its right-of-use asset? (Do not leave any answer field blank. Enter 0 for amounts.)
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