Teal Mountain Leasing Company signs an agreement on January 1, 2017, to lease equipment to Cole Company. The following information relates to this agreemenent
|1.||The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years.|
|2.||The cost of the asset to the lessor is $421,000. The fair value of the asset at January 1, 2017, is $421,000.|
|3.||The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $23,000, none of which is guaranteed.|
|4.||The agreement requires equal annual rental payments, beginning on January 1, 2017.|
Collectibility of the lease payments by Teal Mountain is probable
8% interest rate. Sorry!
WHAT IS THE AMOUNT OF THE ANNUAL RENTAL PAYMENT? The answer is NOT 84323.
Let me know in case you face any issue. Although i have mentioned detail/notes with answer: If answer is rounded to 2 decimal places as per question requirement and if in case discount table is used. Answer can be 81419.93 or .94 or .95
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