On July 1, 2023, Blossom Ltd. leases equipment from Dime Corp., under an eight- year capital (finance) lease. Equal annual payments of $95000 are required, payable on July 1 of each year. The first payment is made on July 1, 2023. The appropriate rate of interest for this lease is 9%, and title will transfer to Blossom at the end of the lease contract. The fair value of the equipment is $588910 and the cost in Dime's accounting records is $545000. The present value of the lease payments is $589605. What is the amount of gross income that Dime would record for the year ended December 31, 2023? $44605 $0 $43910 $(695)

On July 1, 2023, Blossom Ltd. leases equipment from Dime Corp., under an eight- year capital (finance) lease. Equal annual payments of $95000 are required, payable on July 1 of each year. The first payment is made on July 1, 2023. The appropriate rate of interest for this lease is 9%, and title will transfer to Blossom at the end of the lease contract. The fair value of the equipment is $588910 and the cost in Dime's accounting records is $545000. The present value of the lease payments is $589605. What is the amount of gross income that Dime would record for the year ended December 31, 2023? $44605 $0 $43910 $(695)

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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