On December $31,2024,$ Wildhorse Company leased machinery from Blossom Corporation for an agreed$-$upon lease term of $3$ years.

Wildhorse agreed to make annual lease payments of $$14,500,$ beginning on December $31,2024.$ The expected residual value of the

machinery at the end of the lease term is $$7,000.$

Your answer is correct.

What amount will Wildhorse record as its lease liability on December $31,2024,$ if its incremental borrowing rate is $5\%$ 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 $

eTextbook and Media

Your answer is incorrect.

Wildhorse guarantees a residual value of $$7,000$ at the end of the lease term. What if the expected residual value at the end the

lease term is $$3,000$ and Wildhorse guarantees a residual of $$7,000?($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 $