On January 1, 2014, LOR leased a machine (original cost $60,000)to LES for a 5-year period at an implicit interest rate of 15 percent.The lease qualified as a direct financing lease and the annual lease payments ($17,306)are made each December 31.LOR retained the $4,000 estimated unguaranteed residual value , LOR's net receivable and LES's liability would be (round to the nearest dollar):
A)Choice 1
B)Choice 2
C)Choice 3
D)Choice 4

Question

On January 1, 2014, LOR leased a machine (original cost $60,000)to LES for a 5-year period at an implicit interest rate of 15 percent.The lease qualified as a direct financing lease and the annual lease payments ($17,306)are made each December 31.LOR retained the $4,000 estimated unguaranteed residual value , LOR's net receivable and LES's liability would be (round to the nearest dollar): 
A)Choice 1 
B)Choice 2 
C)Choice 3 
D)Choice 4

Quizplus · Accepted Answer

The Answer of On January 1, 2014, LOR leased a machine (original cost $60,000)to LES for a 5-year period at an implicit interest rate of 15 percent.The lease qualified as a direct financing lease and the annual lease payments ($17,306)are made each December 31.LOR retained the $4,000 estimated unguaranteed residual value , LOR's net receivable and LES's liability would be (round to the nearest dollar): 
A)Choice 1 
B)Choice 2 
C)Choice 3 
D)Choice 4

On January 1, 2014, LOR Leased a Machine (Original Cost