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Cullumber Company, a machinery dealer, leased a machine to Ivanhoe Corporation on January 1,2025. The...

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Accounting

Cullumber Company, a machinery dealer, leased a machine to Ivanhoe Corporation on January 1,2025. The lease is for an 8-year period and requires equal annual payments of $30,840 at the beginning of each year. The first payment is received on January 1,2025. Cullumber had purchased the machine during 2024 for $103,000. Collectibility of lease payments by Cullumber is probable. Cullumber set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Cullumber at the termination of the lease.
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