On January 1, 20x1, Bolden's Co. leased machinery with a fair value of $750,000 from ABC Rentals Co. The agreement is a seven-year non-cancelable lease requiring annual payments of $140,000. The lease is appropriately accounted for by Bolden as a finance lease. Boldens incremental borrowing rate is 11%. Bolden knows the interest rate implicit in the lease payments is 10%. At the inception of the lease, Bolden will record an asset in the amount of

The present value of an annuity due of 1 for 7 years at 10% is 5.35526.

The present value of an annuity due of 1 for 7 years at 11% is 5.23054.

a. 749,736

b. 732,276

c. 140,00