10. On Jan. 1, 2018, Janine Company (lessee) entered into a five-year, non can a
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Question
10. On Jan. 1, 2018, Janine Company (lessee) entered into a five-year, non can a entered into a five-year, noncancellable contact to lease a computer from PSU Company (lessor). Fair value of the computer $80,000. Annual rentals are to be paid each Jan. 1, starting Jan. five years and a $5,000 residual value. PSU used a rate of 10% in setting annual rentals. PV Single Sum PV Annuity Due 0.62092 10%, 5 periods 4.16987 Calculate the annual lease payment: a. $19,185. b. $17,986. c. $23,237. d $23.982.Explanation / Answer
PV of residual value=5000*0.62092= $3105 Annual lease payment=(100000-3105)/4.16987= $23237 Option Cis correct
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