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 follow: Present value of an ordinary annuity of $1 6.71008 Present value of the amount of $1 0.46319 On January 1, 2016, what amount should Stephen record as a debit to Lease Receivable?
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 follow: Present value of an ordinary annuity of $1 6.71008 Present value of the amount of $1 0.46319 On January 1, 2016, what amount should Stephen record as a debit to Lease Receivable?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text: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 follow:
Present value of an ordinary annuity of $1 6.71008
Present value of the amount of $1
0.46319
On January 1, 2016, what amount should Stephen record as a debit to Lease Receivable?
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