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What is the effect of the lease on the lessor earnings

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Reference no: EM131867501

Question - Bryant leased equipment that had a retail cash selling price of $710,000 and a useful life of five years with no residual value. The lessor paid $585,000 to acquire the equipment and used an implicit rate of 8% when calculating annual lease payments of $164,652 beginning January 1, the beginning of the lease. Lease payments will be made January 1 each year of the lease. Incremental costs of consummating the lease transaction incurred by the lessor were $20,500.

What is the effect of the lease on the lessor's earnings during the first year (ignore taxes)?

Reference no: EM131867501

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