Cullumber Company leased equipment from Ayayai Company on July 1, 2025, for an eight-year period expiring...
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Cullumber Company leased equipment from Ayayai Company on July 1, 2025, for an eight-year period expiring June 30, 2033. Equal annual payments under the lease are $812000 and are due on July 1 of each year. The first payment was made on July 1, 2025. The rate of interest contemplated by Cullumber and Ayayai is 8%. The lease receivable before the first payment is $5039572 and the cost of the equipment on Ayayai's accounting records was $4520000. Assuming that the lease is appropriately recorded as a sale for accounting purposes by Ayayai, what is the amount of profit on the sale and the interest income that Ayayai would record for the year ended December 31, 2025? Click here to view factor tables. Cullumber Company leased equipment from Ayayai Company on July 1, 2025, for an eight-year period expiring June 30, 2033. Equal annual payments under the lease are $812000 and are due on July 1 of each year. The first payment was made on July 1, 2025. The rate of interest contemplated by Cullumber and Ayayai is 8%. The lease receivable before the first payment is $5039572 and the cost of the equipment on Ayayai's accounting records was $4520000. Assuming that the lease is appropriately recorded as a sale for accounting purposes by Ayayai, what is the amount of profit on the sale and the interest income that Ayayai would record for the year ended December 31, 2025? Click here to view factor tables.
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