Question: A company leased a machine having an expected useful life of 10 years. The lease is a 10 year lease with annual payments of $2,750

A company leased a machine having an expected useful life of 10 years. The lease is a 10 year lease with annual payments of $2,750 paid at the end of each year. There is a guaranteed residual value of $5,000 at the end of the lease. The present value of the lease discounted at the appropriate interest rate (8%) is $20,000. If the company used straight-line depreciation, what was the amount of its first year reported total lease-related expense?

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