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Current Attempt in Progress On January 1,2025, Windsor Co. leased a building to...

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Accounting

Current Attempt in Progress
On January 1,2025, Windsor Co. leased a building to Wildhorse Inc. The relevant information related to the lease is as follows.
The lease arrangement is for 10 years. The building is expected to have a residual value at the end of the lease of $3,100,000(unguaranteed).
The leased building has a cost of $3,600,000 and was purchased for cash on January 1,2025.
The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value.
Lease payments are $250,000 per year and are made at the beginning of the year.
Wildhorse has an incremental borrowing rate of 9%, and the rate implicit in the lease is unknown to Wildhorse.
Both the lessor and the lessee are on a calendar-year basis.
Click here to view factor tables.
(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
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