Compute the amount of the lease receivable

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Reference no: EM132749440

Question: The following facts pertain to a non-cancelable lease agreement between Windsor Leasing Company and Wildhorse Company, a lessee.

Commencement date May 1, 2017

Annual lease payment due at the beginning of each year, beginning with May 1, 2017 $19,656.69

Bargain purchase option price at end of lease term $7,000

Lease term 5 years

Economic life of leased equipment 10 years

Lessor's cost $65,000

Fair value of asset at May 1, 2017 $93,000

Lessor's implicit rate 6 %

Lessee's incremental borrowing rate 6%

The collectibility of the lease payments by Windsor is probable.

Compute the amount of the lease receivable at commencement of the lease.

Lease receivable at commencement $ 93000

Reference no: EM132749440

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