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On January 1, 2020, Blossom Corp., which uses IFRS, signs a 10-year, non-cancellable lease agreement to lease a specialty lathe from Liu Inc. The

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On January 1, 2020, Blossom Corp., which uses IFRS, signs a 10-year, non-cancellable lease agreement to lease a specialty lathe from Liu Inc. The following information concerns the lease agreement. 2. 3. The agreement requires equal rental payments of $85,476 beginning on January 1, 2020. The lathe's fair value on January 1, 2020, is $540,000. The lathe has an estimated economic life of 12 years, with an unguaranteed residual value of $15,000. Blossom Corp. depreciates similar equipment using the straight-line method. The lease is non-renewable. At the termination of the lease, the lathe reverts to the lessor. 4. 5. Blossom's incremental borrowing rate is 11% per year. The lessor's implicit rate is not known by Blossom Corp. 6. The yearly rental payment includes $2.869.90 of executory costs related to insurance on the lathe. Assume this is a manufacturer/dealer lease. Click here to view the factor table PRESENT VALUE OF 1. Fade PRESENT VALUE OF AN ANNUITY DUE

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