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Crane Corporation enters into an agreement with Monty Rentals Co$.$ on January $1,2025$ to lease a machine to be used in its manufacturing operations. The following data pertain to the agreement:

$($a$)$ The term of the noncancelable lease is $3$ years with no renewal option. Payments of $$558151$ are due on January $1$ of each year.

$($b$)$ The fair value of the machine on January $1,2025,$ is $$1540000.$ The machine has a remaining economic life of $10$ years, with no salvage value. The machine reverts to the lessor upon the termination of the lease.

$($c$)$ Crane depreciates all machinery it owns on a straight$-$line basis.

$($d$)$ Crane's incremental borrowing rate is $11\%$ per year. Crane does not know the $9\%$ implicit rate used by Monty.

If Monty records this lease as a sales$-$type lease, what amount would be recorded as Lease Receivable at the inception of the lease?

$$1540000$

$$1674453$

$$1513996$

$$558151$ Crane Corporation enters into an agreement with Monty Rentals Co$.$ on January $1,2025$ to lease a machine to be used in its

manufacturing operations. The following data pertain to the agreement:

$($a$)$ The term of the noncancelable lease is $3$ years with no renewal option. Payments of $$558151$ are due on January $1$ of each year.

$($b$)$ The fair value of the machine on January $1,2025,$ is $$1540000.$ The machine has a remaining economic life of $10$ years, with no

salvage value. The machine reverts to the lessor upon the termination of the lease.

$($c$)$ Crane depreciates all machinery it owns on a straight$-$line basis.

$($d$)$ Crane's incremental borrowing rate is $11\%$ per year. Crane does not know the $9\%$ implicit rate used by Monty.

If Monty records this lease as a sales$-$type lease, what amount would be recorded as Lease Receivable at the inception of the lease?

$$1540000$

$$1674453$

$$1513996$

$$558151$

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