**Recording Sales-Type Lease, Purchase Option—Lessor**Flint Company leased equipment to Land Company for a five-year period. Flint paid $112,716 for the equipment, which equals its current carrying value (with an estimated useful life of five years). The lease commenced on January 1 of Year 1. Flint uses a target rate of return of 8% in all lease contracts. The first payment was received on January 1 of Year 1, and Flint’s accounting periods end on December 31.The lease contract contains a purchase option stating that Land Company can purchase the equipment for $9,600 on January 1 of Year 6, at which time its residual value is estimated to be $15,600. It is reasonably certain that Land Company will exercise the purchase option at the end of the lease term.a. Compute the annual payment calculated by the lessor.- Note: Round the answer to the nearest dollar.- Note: Do not use a negative sign with your answer.\$26,139 (incorrect calculation marked with a red cross)

Flint Company leased equipment to Land Company for a five-year period. Flint paid $112,716 for the equipment, which equals its current carrying value (with estimated useful life of five years). The lease commenced on January 1 of Year 1. Flint uses a target rate of return of 8% in all lease contracts. The first payment was received on January 1 of Year 1, and Flint's accounting periods end on December 31.

Flint Company leased equipment to Land Company for a five-year period. Flint paid $112,716 for the equipment, which equals its current carrying value (with estimated useful life of five years). The lease commenced on January 1 of Year 1. Flint uses a target rate of return of 8% in all lease contracts. The first payment was received on January 1 of Year 1, and Flint's accounting periods end on December 31.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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