Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. kendall county entered into a lease agreement to f

Kendall County entered into a lease agreement to finance computer equipment used in government offices....

60.1K

Verified Solution

Question

Accounting

Kendall County entered into a lease agreement to finance computer equipment used in government offices. The lease covers three years, and county officials are reasonably certain that funding and approvals will be renewed annually. At the inception of the lease, a payment of $450,000 will be made; two additional annual lease payments of $450,000 are to be made near the end of each year. The total amount to be paid under this lease is $1,350,000.The lease arrangements implied an annual interest rate of 5percent. Therefore, the present value of the lease at inception, including the initial payment, is $1,286,734. Assume that the fair value of the equipment at the inception of the lease is $1,300,000.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students