Glade Co. leases computer equipment to customers under direct-financing leases. The equipment has no residual value at the end of the lease and the leases do not contain bargain purchase options. Glade wishes to earn 8% interest on a five-year lease of equipment with a fair value of $323,400. The present value of an annuity due of $1 at 8% for five years is 4.312. What is the total amount of interest revenue that Glade will recognize over the life of the lease? a. $ 51,600 b. $ 75,000 c. $129,360 d. $139,450

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Asked Jan 28, 2020
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Glade Co. leases computer equipment to customers under direct-financing leases. The equipment has no
residual value at the end of the lease and the leases do not contain bargain purchase options. Glade wishes to
earn 8% interest on a five-year lease of equipment with a fair value of $323,400. The present value of an
annuity due of $1 at 8% for five years is 4.312. What is the total amount of interest revenue that Glade will
recognize over the life of the lease?
a. $ 51,600
b. $ 75,000
c. $129,360
d. $139,450

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