On December 31, 2024, Shamrock Corporation signed a 5-year, non-cancelable lease for a machine. The terms...

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On December 31, 2024, Shamrock Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Shamrock to make annual payments of $8,215 at the beginning of each year, starting December 31, 2024. The machine has an estimated useful life of 6 years and a $5,200 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Shamrock uses the straight-line method of depreciation for all of its plant assets. Shamrock's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown. Click here to view factor tables. (a) Your answer is correct. What type of lease is this? This is a/an finance lease. On December 31, 2024, Shamrock Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Shamrock to make annual payments of $8,215 at the beginning of each year, starting December 31, 2024. The machine has an estimated useful life of 6 years and a $5,200 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Shamrock uses the straight-line method of depreciation for all of its plant assets. Shamrock's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown. Click here to view factor tables. (a) Your answer is correct. What type of lease is this? This is a/an finance lease.

Answer rating: 100% (QA)

Answer Yes this lease would be classified as a finance lease In finance leases ... View the full answer