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On January 1, 2023, Carla Vista Corp. enters into an agreement with Dietrich Rentals Inc. to lease a machine from them. Both corporations adhere to
On January 1, 2023, Carla Vista Corp. enters into an agreement with Dietrich Rentals Inc. to lease a machine from them. Both corporations adhere to ASPE. The following data relate to the agreement: 1. The term of the non-cancellable lease is three years with no renewal option. Payments of $286622 are due on December 31 of each year. 2. The fair value of the machine on January 1,2023 , is $696000. The machine has a remaining economic life of 10 years, with no residual value. The machine reverts to the lessor upon the termination of the lease. 3. Carla Vista depreciates all its machinery on a straight-line basis. 4. Carla Vista's incremental borrowing rate is 10%. Carla Vista does not have knowledge of the 8% implicit rate used by Dietrich. If Dietrich records this lease as a finance lease, what amount would be recorded as Lease Receivable at the inception of the lease? $286622$696000$710245$859866 eTextbook and Media
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