Question: As shown below, $772248 is incorrect. What else could it be? On January 1,2025, Ivanhoe, Inc. signs a 10-year noncancelable lease agreement to lease a
On January 1,2025, Ivanhoe, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Flint Warehouse Company. CCollectibility of the lease payments is reasonably predictable and no important uncertainties surround the costs yet to be incurred by the lessor. The following information pertains to this lease agreement: (a) The agreement requires equal rental payments at the beginning of each year. (b) The fair value of the building on January 1,2025 is $5500000; however, the book value to Flint is $4450000. (c) The building has an estimated economic life of 10 years, with no residual value. Ivanhoe depreciates similar buildings using the straight-line method. (d) At the termination of the lease, the title to the building will be transferred to the lessee. (e) Ivanhoe's incremental borrowing rate is 10% per year. Flint Warehouse Co. set the annual rental to ensure a 9% rate of return. The implicit rate of the lessor is known by Ivanhoe, Inc. (f) In addition to the payments for the use of the leased asset, the lessor also requires the lessee to pay a yearly rental payment of $14000 for executory costs related to taxes on the property. Click here to view factor tables. What is the annual lease payment excluding executory costs? (Round factor value calculation to 5 decimal places, eg 1.25124) $772248 $800248 $222248 $786248
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