Does anyone know how to solve problem 10P from chapter 15 in Chegg Book (Intermediate Accounting)? This chapter is related to Leases. On December 31, 2011, company A leased equipment to company B for a four year term. At the end of the term, the equipment is reverted back to company A. The equipment cost company A $300,000 and has an expected useful life of 6 years w/ a normal selling price of $365,000. Company A expects the equipment to have a fair value of $25,000 on December 31, 2015, but it's not guaranteed. Annual lease payment is $104,000 & include $4,000 of executory costs borne by company B. Lease payments are due annually on Dec 31, with first payment due upon inception of the lease. company B's incremental cost of capital is 12% and 10% for company A to ensure rate of return. Straight line method for depreciation. Question: how does company A calculated $104,000 annual lease payment. prepare all j/e related for lessor and lessee.