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Pay annual payments problem

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Wallace Corporation entered into a direct financing lease (interest rate 12 percent) to lease Grommit an asset that cost Wallace $90,000. The lease specified annual year-end payments for seven years. The lease also specified that, along with the last payment, Grommit could purchase the asset for $8,000 cash. Under this lease agreement, Grommit will be required to pay annual payments of:

A) $11,714.

B) $12,858.

C) $17,966.

D) $18,928.

Reference no: EM13148333

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