PROBLEM 4

On January 1, 2020, May Comprehensive Din Company leased to another entity a Machinery, the Lease is treated as Direct Financing Lease

Cost of the Asset 3,787,377.91

Unguaranteed Residual Value400,000

Useful Life and Lease Term4 Years

Implicit Rate 10%

PV of Ordinary Annuity of 8% for 5 periods 3.9927 PV of Annuity Due of 8% for 5 periods 4.3121 PV of 1 of 8% for 5 periods 0.6806PV of Ordinary Annuity of 10% for 4 Periods 3. 1699 PV of Annuity Due of 10% for 4 periods 3.4869 PV of 1 for 10% for 4 periods 0.6830 PV of 1 for 10% for 3 periods 0.7513