On January 1, 2016, The Hammel Company (lessee) entered into a five-year, noncancelable...
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On January 1, 2016, The Hammel Company (lessee) entered into a five-year, noncancelable lease for a machine with payments of $25,981.62 due each January 1. The first payment is due January 1, 2016. The McMillan Company (lessor) has a 10% interest rate known by Hammel. Other data: Fair Value and Book Value of machine: $100,000 Property Taxes included in annual $25,981.62 payments: $2,000 No renewal options. No salvage value. Straight-line depreciation used by both lessee and lessor Economic life of the asset is 5 years. McMillan's 12/31/16 Lease Payment Receivable is: Select one: a. $73,420 O b. $83,620 c. $74,018 d. $76,018 OOO e. $68,416
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