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Please answer all 4. Thank you! ...

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Accounting

Please answer all 4. Thank you! image
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Southern Equipment leases cooling towers to Heating Corporation. The equipment is not specialized and is delivered on January 1, 2019. The fair value of the equipment is $180,000. The cost of the equipment to Southen is S170,000 and the expected life of the testing equipment is 8 years. At the end of the useful life, it is expected that the equipment will have a residual value of $20,000, although the lessee guarantees only $15,000. Southern incurs initial direct costs of $20,000, which they elect to expense. The lease term for the equipment is 8 years, with the first payment due upon delivery, and seven subsequent annual payments beginning on December 31, 2019 and ending on December 31, 2025. Southern's implicit rate is 8% and they expect that collection of the $31,000 payments is probable. The lease is properly classified as a sales-type lease. What is Southen's implicit rate for the lease? (Round any intermediate calculations to the nearest dollar, and round your final percentage two decimal places. X.XX%) 5. 192,397% 7.55% C 9.8% 10.73%

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