On December 31, 2023, Reagan Incorporated signed a lease with Silver Leasing Company for some equipment having a seven-year useful life. The lease payments are made by Reagan annually, beginning at signing date. Title does not transfer to the lessee, so the equipment will be returned to the lessor on December 31, 2029. There is no purchase option, and Reagan guarantees a residual value to the lessor on termination of the lease. Reagan's lease amortization schedule appears below: December 31 Payments $ 90,000 $ 90,000 $ 17,165 $ 90,000 14,251 75,749 2026 $ 90,000 11,221 78,779 2027 $ 90,000 8,070 81,930 2028 $ 90,000 4,793 85,207 2029 $ 36,000 1,385 34,615 What is the amount of residual value guaranteed by Reagan to the lessor? 2023 2023 2024 2025 Decrease in Outstanding Balance Balance $ 519,115 429,115 356,280 280,531 Interest $ 90,000 72,835 201,752 119,822 34,615

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On December 31, 2023, Reagan Incorporated signed a lease with Silver Leasing Company for some equipment
having a seven-year useful life. The lease payments are made by Reagan annually, beginning at signing date.
Title does not transfer to the lessee, so the equipment will be returned to the lessor on December 31, 2029.
There is no purchase option, and Reagan guarantees a residual value to the lessor on termination of the lease.
Reagan's lease amortization schedule appears below:
December
31
2023
2023
2024
2025
2026
2027
Payments
$ 90,000
$ 90,000
$ 90,000
$ 90,000
Multiple Choice
$36.000
Interest
$1,385
$ 17,165
14,251
11,221
8,070
4,793
1,385
78,779
$ 90,000
81,930
2028
$ 90,000
85,207
2029
$36,000
34,615
What is the amount of residual value guaranteed by Reagan to the lessor?
$34,615
Decrease in Outstanding
Balance Balance
$ 90,000
72,835
75,749
Cannot be determined from the given information
$ 519,115
429,115
356,280
280,531
201,752
119,822
34,615
Suomit
Transcribed Image Text:On December 31, 2023, Reagan Incorporated signed a lease with Silver Leasing Company for some equipment having a seven-year useful life. The lease payments are made by Reagan annually, beginning at signing date. Title does not transfer to the lessee, so the equipment will be returned to the lessor on December 31, 2029. There is no purchase option, and Reagan guarantees a residual value to the lessor on termination of the lease. Reagan's lease amortization schedule appears below: December 31 2023 2023 2024 2025 2026 2027 Payments $ 90,000 $ 90,000 $ 90,000 $ 90,000 Multiple Choice $36.000 Interest $1,385 $ 17,165 14,251 11,221 8,070 4,793 1,385 78,779 $ 90,000 81,930 2028 $ 90,000 85,207 2029 $36,000 34,615 What is the amount of residual value guaranteed by Reagan to the lessor? $34,615 Decrease in Outstanding Balance Balance $ 90,000 72,835 75,749 Cannot be determined from the given information $ 519,115 429,115 356,280 280,531 201,752 119,822 34,615 Suomit
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