Splish Brothers Company leases equipment for 8 years with an annual rental of $2,900 per year or $23,200 in total. General Leasing (the lessor) agrees to provide Splish Brothers with $400 for the first 2 years of the lease to defray needed repairs to the equipment. Determine the total lease payments that Splish Brothers will pay for the first 3 years of the lease agreement.

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A: Step 2 in the solution.

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A:

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.