Dallas Company leases a machine from TX Corp. under an agreement which meets...
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Dallas Company leases a machine from TX Corp. under an agreement which meets the criteria to be a capital lease for Dallas. The six-year lease requires payment of $150,000 at the beginning of each year, including $30,000 per year for maintenance, insurance, and taxes. The incremental borrowing rate for the lessee is 10%; the lessor's implicit rate is 8% and is known by the lessee. The present value of an annuity due of 1 for six years at 10% is 4.79079
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