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On January 1, Ramirez Supply leased a car for a four-year period, at which time possession of the car will revert back to the lessor.
On January 1, Ramirez Supply leased a car for a four-year period, at which time possession of the car will revert back to the lessor. Annual lease payments are $21,600 due on December 31 of each year, calculated by the lessor using a 7% discount rate. Negotiations led to Ramirez guaranteeing the lessor a $64,800 residual value at the end of the lease term although Ramirez estimates that the residual value after four years will be $61,400. What is the amount to be added to the right-of-use asset and lease payable under the residual value guarantee? Note: Round your answer to the nearest whole dollar amount. The present value of $1:n=4,i=7% is 0.76290 . The present value of an ordinary annuity of $1:n=4,i=7% is 3.38721 . The present value of an annuity due of $1:n=4,i=7% is 3.62432 . Multiple Choice $3,279 $3,461 $2,594 $4,120
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