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On 1-1-2022, Tarantula Company (lessor) leased some equipment to the Summers Company (lessee). It was a 5-year noncancelable lease requiring Summers to pay Tarantula $100.000
On 1-1-2022, Tarantula Company (lessor) leased some equipment to the Summers Company (lessee). It was a 5-year noncancelable lease requiring Summers to pay Tarantula $100.000 every 12-31 during the lease period. The equipment has an estimated residual value of $100,000 at the end of the lease (i.e., 12-31-2026). The equipment has an estimated economic life of 6 years with no expected residual value (i.e. $0) at the end of that time (i.e., 12-31-2027). Tarantula sets the lease payments so as to earn a 11% annual rate of return; Summers is aware of this rate. This is a finance lease for Summers Company (lessee). What will be the reduction in the lease liability for Summers Company (lessee) for 2023
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