On December 31, 2024, Blossom Company leased machinery from Wildhorse Corporation for an agreed-upon lease term of 3 years. Blossom agreed to make annual lease payments of $13,000, beginning on December 31, 2024. The expected residual value of the machinery at the end of the lease term is $7,000, though Blossom does not guarantee any residual value to Wildhorse. What amount will Blossom record as its lease liability on December 31, 2024, if its incremental borrowing rate is 8% and the implicit rate of the lease is unknown? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answe to O decimal places, eg. 5,275.) Click here to view factor tables. Lease liability $ 33502
On December 31, 2024, Blossom Company leased machinery from Wildhorse Corporation for an agreed-upon lease term of 3 years. Blossom agreed to make annual lease payments of $13,000, beginning on December 31, 2024. The expected residual value of the machinery at the end of the lease term is $7,000, though Blossom does not guarantee any residual value to Wildhorse. What amount will Blossom record as its lease liability on December 31, 2024, if its incremental borrowing rate is 8% and the implicit rate of the lease is unknown? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answe to O decimal places, eg. 5,275.) Click here to view factor tables. Lease liability $ 33502
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2024, Blossom Company leased machinery from Wildhorse Corporation for an agreed-upon lease term of 3 years.
Blossom agreed to make annual lease payments of $13,000, beginning on December 31, 2024. The expected residual value of the
machinery at the end of the lease term is $7,000, though Blossom does not guarantee any residual value to Wildhorse.
What amount will Blossom record as its lease liability on December 31, 2024, if its incremental borrowing rate is 8% and the implicit
rate of the lease is unknown? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer
to O decimal places, e.g. 5,275.)
Click here to view factor tables.
Lease liability $
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33502
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