QUESTION 8 Mays Company has a machine with a cost of $750,000 which also is its fair value on the date the machine is leased to Park Company. The lease is for 6 years and the machine is estimated to have an unguaranteed residual value of $75,000. If the lessor's interest rate implicit in the lease is 1296, the six beginning-of-the-year lease payments would be $162,874. $154,623. $146.587. $125,000. QUESTION 9 Metro Company, a dealer in machinery and equipment, leased equipment to Sands, Inc., on July 1, 2018. The lease is appropriately accounted for as a sales-type lease by Metro and as a finance lease by Sands. The lease is for a 10-year period (the useful life of the asset) expiring June 30, 2028. The first of 10 equal annual payments of $828,000 was made on July 1, 2018. Metro had purchased the equipment for $5,250,000 on January 1, 2018, and established a list selling price of $7,200,000 on the equipment. Assume that the present value at July 1, 2018, of the rent payments over the lease term discounted at 896 (the appropriate interest rate) was $6,000,000. What is the amount of profit on the sale and the amount of interest revenue that Metro should record for the year ended December 31, 2018? $0 and $137,920 $750,000 and $206,880 $750,000 and $240,000 $1,200,000 and $480,000 QUESTION 10 On December 31, 2018, Kuhn Corporation leased a plane from Bell Company for an seven-year period expiring December 31, 2025. Equal annual payments of $450,000 are due on December 31 of each year, beginning with December 31, 2018. The lease is properly classified as a finance lease on Kuhn's books. The present value at December 31, 2018 of the eight lease payments over the lease term discounted at 1096 is $2,640,792. The lease has a guaranteed residual value of $50,000, however the lessee expects the residual value to be only $25,000. Assuming the first payment is made on time, the amount that should be reported by Kuhn Corporation as the lease liability on its December 31, 2018 balance sheet is