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Miller Company leased equipment from Baxter Company on July 1,2025, for an eight-year period expiring...

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Accounting

Miller Company leased equipment from Baxter Company on July 1,2025, for an eight-year period expiring June 30,2033. One of the lease terms is a guaranteed residual amount of $10,000. The residual expected by Miller will be $7,500. The lease meets the criteria of a finance lease. What is the residual value amount that would be included in the calculation of Miller's lease liability/right-of use asset?
A) The present value of $10,000.
B) The present value of $2,500
C) The residual would not be included in the calculation of the lease liability/right-of-use asset.
D) The present value of $7,500.
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