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On January 2, Year 1, Buffay Leasing Company leases equipment to Gunther Co with 5 equal annual payments of $240,000 each payable beginning January 2

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On January 2, Year 1, Buffay Leasing Company leases equipment to Gunther Co with 5 equal annual payments of $240,000 each payable beginning January 2 Year 1. Gunther Co. agrees to guarantee the $150.000 residual value of the asset at the end of the lease term. The expected value of the residual is $150,000. Gunther's incremental borrowing rate is 10%. however it knows that Buffay's implicit interest rate is 8%. The journal entry Gunther makes at January 2 Year 1 includes a debit to right-of- use asset for? $1.136,998 $1.034,911 O $1,000.766 O $1.149.787

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