Guaranteed and Unguaranteed Residual Values Grygiel Company leases a nonspecialized machine with a fair value of $60,000 to Baker Company. The lease has a life of 6 years and requires a $9,000 payment at the end of each year. The lease does not include a transfer of ownership nor a bargain purchase option, and the life of the lease is less than a major part of the expected economic life of the machine. It is probable that Grygiel will collect the lease payments plus any amount necessary to satisfy a residual value guarantee. Round intermediate and final answers to the nearest dollar.
Guaranteed and Unguaranteed Residual Values Grygiel Company leases a nonspecialized machine with a fair value of $60,000 to Baker Company. The lease has a life of 6 years and requires a $9,000 payment at the end of each year. The lease does not include a transfer of ownership nor a bargain purchase option, and the life of the lease is less than a major part of the expected economic life of the machine. It is probable that Grygiel will collect the lease payments plus any amount necessary to satisfy a residual value guarantee. Round intermediate and final answers to the nearest dollar.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 8RE: Use the following information to decide whether this equipment lease qualifies as an operating,...
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Guaranteed and Unguaranteed Residual Values
Grygiel Company leases a nonspecialized machine with a fair value of $60,000 to Baker Company. The lease has a life of 6 years and requires a $9,000 payment at the end of each year. The lease does not include a transfer of ownership nor a bargain purchase option, and the life of the lease is less than a major part of the expected economic life of the machine. It is probable that Grygiel will collect the lease payments plus any amount necessary to satisfy a residual value guarantee. Round intermediate and final answers to the nearest dollar.
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