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

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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