You discover that the company entered into an agreement with Mcdonald to lease equipment from Mcdonald for 10 years. The agreement dated 1/1/19 required 10 payments in total. The first was on 1/1/19 and second 12/31/19 and the remaining payments on 12/31 of the next 8 years. The payments are $7,500 each. The normal life of the equipment is 12 years. Ronald guaranteed a residual value of $1,000.

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