The following information pertains to a sale and leaseback of equipment by Mega Co. on December 31,
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Question:
of equipment by Mega Co. on December 31, year 1:
Sales price $400,000
Carrying amount $300,000
Monthly lease payment $ 3,250
Present value of lease payments $ 36,900
Estimated remaining life 25 years
Lease term 1 year
Implicit rate 12%
What amount of deferred gain on the sale should Mega report at
December 31, year 1?
$0
$ 36,900
$ 63,100
$100,000
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
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