Reference no: EM132468396

Problem 1: Northern Equipment leases cooling towers to Warmup 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 Northern is? $170,000 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. Northern 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.? Northern's implicit rate is? 8% and they expect that collection of the $ 29,000 payments is probable. The lease is properly classified as a sales-type lease.

Question 1: What amount will be recorded for cost of goods? sold? (Round any present value calculations to the nearest? dollar, and round any percentages two decimal? places, X.XX%.)