PLEASE PROVIDE CORRECT ANSWER AND I WILL LIKE YOUR ANSWER. Indigo Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Sweet Medical Center for a period of 10 years. The normal selling price of the machine is $503,479, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $14,500. The hospital will pay rents of $61,000 at the beginning of each year. Indigo incurred costs of $225,000 in manufacturing the machine and $14,600 in legal fees directly related to the signing of the lease. Indigo has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Sweet Medical Center has an incremental borrowing rate of 5% and an expected residual value at the end of the lease of $10,000.
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
PLEASE PROVIDE CORRECT ANSWER AND I WILL LIKE YOUR ANSWER.
Indigo Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Sweet Medical Center for a period of 10 years. The normal selling price of the machine is $503,479, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $14,500. The hospital will pay rents of $61,000 at the beginning of each year. Indigo incurred costs of $225,000 in manufacturing the machine and $14,600 in legal fees directly related to the signing of the lease. Indigo has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Sweet Medical Center has an incremental borrowing rate of 5% and an expected residual value at the end of the lease of $10,000.
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