Tempe Corp. leased some equipment to Glendale, Inc. on January 1, 2010. The lease required six annual

Question:

Tempe Corp. leased some equipment to Glendale, Inc. on January 1, 2010. The lease required six annual payments, with the first payment due on December 31, 2010. The cost, and also fair value, of the equipment was $140,000, and there was no estimated residual value at the end of the six-year period. The lease was a direct financing lease and does qualify as a capital lease for Tempe. Tempe's desired rate of return is 9%. Use the following factors for 6 periods:
Present value of an ordinary 4.485919 [9%]
Present value of due 4.889651 [9%]
Required: Compute the annual payment
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...