On December 31, 2019, Marin Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Marin to make annual payments of $8,566 at the beginning of each year, starting December 31, 2019. The machine has an estimated useful life of 6 years and a $4,500 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Marin uses the straight-line method of depreciation for all of its plant assets. Marin’s incremental borrowing rate is 7%, and the lessor’s implicit rate is unknown.
What type of lease is this?
Compute the present value of lease
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On December 31, 2019, Marin Corporation signed a 5-year, non-cancelable lease for a machine. The ter...
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