Question
please solve A through D and show how you calculated each value Recording Operating Lease EntriesLessor On January 1, Lessee Inc. leased equipment at an
please solve A through D and show how you calculated each value
Recording Operating Lease EntriesLessor
On January 1, Lessee Inc. leased equipment at an annual payment of $85,099 payable at the beginning of each year for 4 years. The equipment had a fair value of $400,000, a book value of $375,000, and was commonly purchased or leased by customers. The lessor estimates that the equipment has an estimated useful life of 8 years and an estimated residual value of $125,000, not guaranteed by the lessee. Lessors implicit rate is 7.5%, which is unknown to the lessee. The lessees incremental borrowing rate is 8%. The lease does not contain a purchase option or a renewal option. The lessee had no other costs associated with this lease.
Required a. Recalculate the lessor's lease payment. - Note: Round answer to the nearest dollar. - Note: Do not use a negative sign with yourStep by Step Solution
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