Technoid Inc. sells computer systems. Technoid ( the lessor) leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million. This noncancelable lease had the following terms: • Lease payments: $2,466,754 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. The present value of the lease payments is $20 million. • Lease term: five years (10 semiannual payments). • No residual vàlue; no purchase option. • Economic life of equipment: five years.

Technoid Inc. sells computer systems. Technoid ( the lessor) leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million. This noncancelable lease had the following terms: • Lease payments: $2,466,754 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. The present value of the lease payments is $20 million. • Lease term: five years (10 semiannual payments). • No residual vàlue; no purchase option. • Economic life of equipment: five years.

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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