Question Content AreaOn January 1, 2016, Stephen Corp., a lessor, signed a direct financing lease. Stephen was to receive annual year-end payments of $10,000 for ten years, after which there was a guaranteed residual value of $8,000. The implicit interest rate was 8%. Actuarial information for 8%, ten periods follows (round to the nearest whole dollar):Present value of ordinary annuity of $16.71008Present value of amount of $10.46319On January 1, 2016, what amount should Stephen record as a debit to Lease Receivable?$100,000$67,100$108,000$70,814

In this question, we have to find out the amount which should be recorded as a debit to lease…

Answered: n January 1, 2016, Stephen Corp., a…

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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On January 1, 2016, Stephen Corp., a lessor, signed a direct financing lease. Stephen was to receive annual year-end payments of $10,000 for ten years, after which there was a guaranteed residual value of $8,000. The implicit interest rate was 8%. Actuarial information for 8%, ten periods follows (round to the nearest whole dollar):

Present value of ordinary annuity of $1 6.71008

Present value of amount of $1 0.46319

On January 1, 2016, what amount should Stephen record as a debit to Lease Receivable?

$100,000

$67,100

$108,000

$70,814

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