Question
Need answer Windsor Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Sheridan Company. The term of the noncancelable
Need answer
Windsor Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Sheridan Company. The term of the noncancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Sheridan Company has the option to purchase the equipment for $16,600 upon termination of the lease. 2. The equipment has a cost and fair value of $163,000 to Windsor Leasing Company. The useful economic life is 2 years, with a salvage value of $16,600. 3. Sheridan Company is required to pay $5,200 each year to the lessor for executory costs. 4. Windsor Leasing Company desires to earn a return of 10% on its investment. 5. Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor.
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