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On December 3 1 , 2 0 2 4 , Crane Company leased machinery from Blossom Corporation for an agreed - upon lease term of

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On December 31,2024, Crane Company leased machinery from Blossom Corporation for an agreed-upon lease term of 3 years. Crane agreed to make annual lease payments of $12,000, beginning on December 31,2024. The expected residual value of the machinery at the end of the lease term is $6,000, though Crane does not guarantee any residual value to Blossom.
What amount will Crane record as its lease liability on December 31,2024, if its incremental borrowing rate is 4% and the implicit rate of the lease is unknown? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g.5.275.)
Click here to view factor tables.
Lease liability
TABLE 6.2 Present Value of 1(Present Value of a Single Sum)
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