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Sunland Company manufactures a check - in kiosk with an estimated economic life of 1 2 years and leases it to Coronado Airlines for a

Sunland Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to Coronado Airlines for a period of 10 years. The normal selling price of the equipment is $291,687, and its unguaranteed residual value at the end of the lease term is estimated to be $20,800. Coronado will pay annual payments of $43,500 at the beginning of each year. Sunland incurred costs of $164,300 in manufacturing the equipment and $4,300 in sales commissions in closing the lease. Sunland has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 11%. Coronado Airlines has an incremental borrowing rate of 11%.
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(a)
Discuss the nature of this lease in relation to the lessee.
This is a
Compute the amount of the initial lease liability. (Round present value factor calculations to 5 decimal places, es.1.25124 and the final answer to odecimal place eg.58,971)
The amount of the initial lease liability $
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