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Blossom Company, a machinery dealer, leased a machine to Crane Corporation on January 1, 2025....

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Accounting

image Blossom Company, a machinery dealer, leased a machine to Crane Corporation on January 1, 2025. The lease is for an 8-year period and requires equal annual payments of $24,300 at the beginning of each year. The first payment is received on January 1, 2025. Blossom had purchased the machine during 2024 for $160,000. Collectibility of lease payments by Blossom is probable. Blossom set the annual rental to ensure a 5% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Blossom at the termination of the lease. Assume that Crane Corporation does not know the rate implicit in the lease used by Blossom, and Crane's incremental borrowing rate is 7%. In addition, assume that Crane incurs initial direct costs of $19,000. (a) X Your answer is incorrect. Compute the amount of the lease liability and right-of-use asset for Crane. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Lease liability $ Right-of-use asset $

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