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Cullumber Services Inc. accounts for the lease of a truck. The lease includes a residual...

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Accounting

Cullumber Services Inc. accounts for the lease of a truck. The lease includes a residual value guarantee at the end of the lease term of $15,800. Cullumber estimates that the likelihood that the residual value will be $15,800 has a 55% certainty. Cullumber feels that there is a 30% chance that the residual value will be $12,800 and a 15% chance that it will be $9,500.
Calculate the probability-weighted value of the residual guarantee that needs to be included in the measurement of the lease payments liability recorded by Cullumber when the lease is signed.

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