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On January 1, 2023, Wildhorse Corp., which hises IFRS, signs a 10-year, non-cancellable lease agreement to lease a specialty lathe from Liu Inc. The following
On January 1, 2023, Wildhorse Corp., which hises IFRS, signs a 10-year, non-cancellable lease agreement to lease a specialty lathe from Liu Inc. The following information concerns the lease agreement. 1. The agreement requires equal rental payments of $85,560 beginning on January 1,2023. 2. The lathe's fair value on January 1,2023 , is $540,000. 3. The lathe has an estimated economic life of 12 years, with an unguaranteed residual value of $17,000. Wildhorse depreciates similar equipment using the straight-line method. 4. The lease is non-renewable. At the termination of the lease, the lathe reverts to the lessor. 5. Wildhorse's incremental borrowing rate is 11% per year. The lessor's implicit rate is not known by Wildhorse. 6. The yearly rental payment includes $2,953.90 of executory costs related to insurance on the lathe. WILDHORSE CORP. Lease Amortization Schedule (Lessee) Annual Payment Excluding Interest (11\%) on Reduction Executory Unpaid of lease Liability Liability Jan.1,2023$ $ $ Jan. 1,2024 Jan. 1,2025 Jan. 1,2026 Jan. 1,2027 tan1,2028 Jan1.2029 Jan. 1,2030 Jan1,2031 Jans 2032 e. .5,275.25
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