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1. On January 1, 2017, XYZ Company signed an 4-year lease agreement for equipment. Annual...

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Finance

1. On January 1, 2017, XYZ Company signed an 4-year lease agreement for equipment. Annual payments are $28,500, to be made at the beginning of each year. At the end of the lease, the equipment will revert to the lessor. The equipment has a useful life of 8 years and has no residual value. At the time of the lease agreement, the equipment has a fair value of Rs. 300,000. An interest rate of 10.5% and straight-line depreciation are used.

We just have to indicate the type of lease in this question

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