On January 2, 20X1, Gold Sor Lesting Company leases equipment to Brick Co. with 5 equal annual payments of $40,000, payable beginning December 31, 20X1. Brick Co. agrees to guarantee the $25,000 residual value of the asset at the end of the lease term Brick's incremental borrowing rate is 10% and Brick does not know that Gold Star's implicit interest rate is 8% Assume this is a financing type lease PV. Annuity De PV Ordinary Anity 8%, 5 periods 10%, 5periods What is the balance of the lease receivable on January 1, 20X27 431213 4.16986 3.99271 3.79079 PV Single Sum 0.68058 0.62092
On January 2, 20X1, Gold Sor Lesting Company leases equipment to Brick Co. with 5 equal annual payments of $40,000, payable beginning December 31, 20X1. Brick Co. agrees to guarantee the $25,000 residual value of the asset at the end of the lease term Brick's incremental borrowing rate is 10% and Brick does not know that Gold Star's implicit interest rate is 8% Assume this is a financing type lease PV. Annuity De PV Ordinary Anity 8%, 5 periods 10%, 5periods What is the balance of the lease receivable on January 1, 20X27 431213 4.16986 3.99271 3.79079 PV Single Sum 0.68058 0.62092
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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