Lessor leases equipment with a fair market value of $1,400,000 to Lessee. The term of the lease

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Lessor leases equipment with a fair market value of $1,400,000 to Lessee. The term of the lease is 4 years. Lessor uses an implicit rate of 8% in computing lease payments. Payment is due annually on January 1, starting on the lease date. Assuming the equipment has an unguaranteed residual value of $200,000, at what amount would Lessor set the annual lease payment (rounded to nearest $)?

Present value of $1 for 4 periods at 8% .73503

Present value of annuity due for 4 periods at 8% 3.57710

a.$391,378

b.$350,282

c.$359,348

d.$401,509

Posted Date: Nov 16, 2021 10:26 AM

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Lessor leases equipment with a fair market value of $1,400,000 to Lessee. The term of the lease

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