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 $ 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? Payments $ 90,000 $ 90,000 $ 17,165 $ 90,000 14,251 $ 90,000 11,221 Multiple Choice O $36,000 $1,385 Interest $34,615 8,070 4,793 1,385 Decrease in Outstanding Balance Balance $ 519,115 Cannot be determined from the given information $ 90,000 72,835 75,749 78,779 429, 115 356,280 280,531 201,752 119,822 34,615

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.