On December Skysong Corporation signed a year, noncancelable lease for a machine. The terms of the
lease called for Skysong to make annual payments of $ at the beginning of each year of the lease, starting
December The machine has an estimated useful life of years and a $ unguaranteed residual value. The
machine reverts back to the lessor at the end of the lease term. Skysong uses the straightline method of depreciation
for all of its plant assets. Skysong's incremental borrowing rate is and the lessor's implicit rate is unknown.
Click here to view factor tables.
a
Your answer is correct.
What type of lease is this?
This is aan
lease.
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b
Compute the present value of the lease payments. For calculation purposes, use decimal places as
displayed in the factor table provided and round final answer to decimal places eg
Present value of the lease payments
$
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