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What are the solutions to these two questions below? On January 1, 2019 Walgreens entered into a non-cancellable lease agreement with Pharmaceutical Equipment, Inc. (PE)
What are the solutions to these two questions below?
On January 1, 2019 Walgreens entered into a non-cancellable lease agreement with Pharmaceutical Equipment, Inc. (PE) tor the lease of specialized laboratory equipment designed to draw blood to perform health tests tor their customers. T ne lease agreement requires WAG to make beginning ot the year payments tor the 5-year term ot the lease. T ne fair value ot the equipment at lease inception is S25,418, 156. WAG guarantees to PE that the residual value ot the equipment at the end ot the term of the lease will be However, given that the equipment is heavily used by WAG it nas an expected residual value at the end ot the lease of The useful life of the equipment is 10 years with a salvage value to PE ot Botn PE and WAG use the straight-line method of depreciation (or amortization) for their equipment and right ot use assets. The lease contract includes a written option that would give WAG the option to purchase the underlying equipment tor a price ot Collectability ot lease payments is reasonably predictable. PE's implicit rate ot return ot 8% is known to WAG and WAG's incremental borrowing rate is 10%. What would be the amount to be recovered by the lessor (PE) through equal lease payments? Please exclude any decimals, commas or dollar signs from your response.
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