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Wildhorse Corporation enters into an agreement with Ayayai Rentals Co, on January 1, 2025 to lease a machine to be used in its manufacturing operations.

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Wildhorse Corporation enters into an agreement with Ayayai Rentals Co, on January 1, 2025 to lease a machine to be used in its manufacturing operations. The following data pertain to the agreement: (a) The term of the noncancelable lease is 3 years with no renewal option. Payments of $736545 are due on January 1 of each year. (b) The fair value of the machine on January 1, 2025, is $2050000. The machine has a remaining economic life of 10 years, with no salvage value. The machine reverts to the lessor upon the termination of the lease. The cost of the machine on Ayayai Rentals' books is $1383750. (c) Wildhorse depreciates all machinery it owns on a straight-line basis. (d) Wildhorse's incremental borrowing rate is 9% per year. Wildhorse does not know the 8% implicit rate used by Ayayai. (e) Immediately after signing the lease, Ayayai finds out that Wildhorse Corp. is the defendant in a suit that is sufficiently material to make collectibility of future lease payments doubtful. Which of the following lease-related revenue and expense items would be recorded by Ayayai if the lease is accounted for as an operating lease? (Round factor value calculation to 5 decimal places, eg. 1.25124.) Click here to view factor tables. Interest Revenue only of $736545 Lease Revenue only of $736545 Depreciation Expense only of $153750 Lease Revenue of $736545 and Depreciation Expense of $153750 TABLE 6.1 Future Value of 1 Future Value of a Single Sur) TABLr 6.1 Future Value of 1 TABLE 6.1 Future Value of 1 TABLE 6.2 Present Value of 1 (Present Value of a Single Sum) TABLE 62 Present Value of 1 TARI F 6.3 Futurn Value of an Ordinaru Annuitu of 1 TABLE 6.3 Future Value of an Ordinary Annuity of 1 TABLE 6.4 Present Value of an Ordinary Annuity of 1 1 TABLE 6.4 Present Value of an Ordinary Annuity of 1 TABLE 6.5 Present Value of an Annuity Due of 1 TABLE 6.5 Present Value of an Annuity Due of 1

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