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Blossom Company, a machinery dealer, leased a machine to Dexter Corporation on January 1.2020. The...

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Accounting

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Blossom Company, a machinery dealer, leased a machine to Dexter Corporation on January 1.2020. The lease is for an 8 -year period and requires equal annual payments of $28,865 at the beginning of each year. The first payment is received on January 1,2020 . Blossom had purchased the machine during 2019 for $100,000. Collectibility of lease payments by Blossom is probable. Blossom set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Blossom at the termination of the lease. Click here to view factor tables

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