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Please help me Answer this Asap! INTERMEDIATE ACCOUNTING 2 I need 100% sure answer. I will give good feedback and thumbs up. Thank you in
Please help me Answer this Asap!
INTERMEDIATE ACCOUNTING 2
I need 100% sure answer. I will give good feedback and thumbs up. Thank you in advance!
13. Flight Co., a manufacturer, offers brand new machines either for sale or for lease. Flight Co. enters into a lease with Bumblebee, Inc. for a particular machine with cash selling price of P2,738,081 and a manufacturing cost of P1,500,000. The lease term is 4 years and annual rentals are due at the beginning of each year. The machine has a useful life of 5 years and will revert back to Flight Co. at the end of the lease, at which time the machine's residual value is expected to be P180,000. Flight Co. accounts for the lease as a sales type lease. Flight Co.'s internal rate of return is 10%. What amount of annual rental should Flight Co. charge Bumblebee, Inc. if the residual value is (a) guaranteed and (b) unguaranteed? a. 750,000; 785,259 c. 600,000; 600,000 b. 750,000; 750,000 d. 600,000; 678,250Step by Step Solution
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