P21.7 (LQ.3) (Lessor Computations and Entries, Sales-Type Lease with Guaranteed Residual Value) Amirante SA manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is R$495,678, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be R$15,000. The hospital will pay rents of R$60,000 at the beginning of each year. Amirante incurred R$300,000 in manufacturing costs and R$14,000 in legal fees directly related to the signing of the lease. Amirante has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%.

P21.7 (LQ.3) (Lessor Computations and Entries, Sales-Type Lease with Guaranteed Residual Value) Amirante SA manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is R$495,678, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be R$15,000. The hospital will pay rents of R$60,000 at the beginning of each year. Amirante incurred R$300,000 in manufacturing costs and R$14,000 in legal fees directly related to the signing of the lease. Amirante has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%.

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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