Question

Exercise 21-6 (Part Level Submission) Cheyenne Company, a machinery dealer, leased a machine to Dexter Corporation on ]anuary 1, 2017. The lease is for an 8-year period and requires equal annual payments of $34,137 at the beginning of each year. The first payment is received on anuary 1, 2017. Cheyenne had purchased the machine during 2016 for $155,000. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by Cheyenne. Cheyenne set the annual rental to ensure an 11% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Cheyenne at the termination of the lease. Compute the amount of the lease receivable. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to D decimal places e.g. 58,971.) The amount of the lease receivables Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Attempts: 0 of 3 used SAVE FOR LATER

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Answer 1

Computation of Amount of Lease Receivable

Annual Lease Rent: $34137

Period of Lease : 8 Year

Lease Receivable at inception ( $34137X8)=$273096

Lease rental made at the the begining of year: $34137

Lease receivable:-                                          = $238959