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What amount of net investment in the lease should the lessor

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Reference no: EM132920811

Information on a lease is shown below:

Cost of equipment ?1,200,000

Useful life of equipment 5 years

Lease term 4 years

Annual rent payable at the end of each year ?400,000

Interest rate implicit in the lease 10%

Residual value ?80,000

Problem 1: The lease provides that ownership over the equipment will be transferred to the lessee at the end of the lease term. What amount of net investment in the lease should the lessor recognize at the commencement date?

Reference no: EM132920811

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