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What is the appropriate amount of cost

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Reference no: EM132633285

Question - Renter Co. acquired the use of a machine by agreeing to pay the manufacturer of the machine $900 per year for 6 years. At the time the lease was signed, the interest rate for a 6-year loan was 14%.

Required -

a. Calculate the amount that Renter Co. could have paid at the beginning of the lease to buy the machine outright.

b. What is the appropriate amount of cost to be reported in Renter Co.'s balance sheet (at the time the lease was signed) with respect to this asset?

Reference no: EM132633285

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