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Tomtit [17]
3 years ago
8

Free Company (lessee) leases a machine from Denner Corp. (lessor) under an agreement which meets the criteria to be a financing

lease for Free. The six-year lease requires payments of $136,000 at the beginning of each year. The $136,000 includes $20,000 per year paid to a third party for maintenance, insurance, and taxes The incremental borrowing rate for the lessee is 8%; the lessor's implicit rate is 10% and is known by the lessee. The present value of an annuity due of 1 for six years at 8% is 4.99271. The present value of an annuity due of 1 for six years at 10% is 4.79079. Free should record the Right to Use Asset at:______
a. $579,154.
b. $679,008.
c. $555,732.
d. $651,548.
Business
1 answer:
svetoff [14.1K]3 years ago
5 0
Answer:a is the answer I’m pretty sure yea it is i double checked
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