Cullumber Company has a machine with a cost of $651000 which also is its fair value on the date the machine is leased to Park Company. The lease is for 6 years and the machine is estimated to have an unguaranteed residual value of $64000. If the lessor’s interest rate implicit in the lease is 12%, the 6 beginning-of-the-year lease payments would be 127,476 108,500 134,333 141,375

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.