Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Answer (B0
incorrect answers are 36,904 and 36,315
Transcribed Image Text:On December 31, 2024, Teal Mountain Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called
for Teal Mountain to make annual payments of $8,200 at the beginning of each year, starting December 31, 2024. The machine has an
estimated useful life of 6 years and a $5,500 unguaranteed residual value. The machine reverts back to the lessor at the end of the
lease term. Teal Mountain uses the straight-line method of depreciation for all of its plant assets. Teal Mountain's incremental
borrowing rate is 11%, and the lessor's implicit rate is unknown.
Click here to view factor tables.
(a)
(b)
Your answer is incorrect.
Compute the present value of the lease payments. (For calculation purposes, use 5 decimal places as displayed in the factor table
provided and round final answer to O decimal places e.g. 5,275.)
Present value of the lease payments $
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