Determine the lease receivable account balance

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Problem - On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of $10,000 at the beginning of each year. The machine cost $40,000 and has a useful life of 8 years with no residual value. Kern's implicit interest rate is 10%, and present value factors are as follows:

Present value for an annuity due of $1 at 10% for 6 periods 4.791

Present value for an annuity due of $1 at 10% for 8 periods 5.868

Kern appropriately recorded the lease as a salestype lease. At the inception of the lease, determine the Lease Receivable account balance?

Reference no: EM132891966

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