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On December 31, 2024, Splish Brothers Corporation signed a 5-year, non-cancelable lease for a machine....

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Accounting

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On December 31, 2024, Splish Brothers Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Splish Brothers to make annual payments of $8,634 at the beginning of each year, starting December 31, 2024. The machine has an estimated useful life of 6 years and a $4,900 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Splish Brothers uses the straight-line method of depreciation for all of its plant assets. Splish Brothers's incremental borrowing rate is 6%, and the lessor's implicit rate is unknown. Click here to view factor tables. Compute the present value of the lease payments. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places e. 8.5,275.) Present value of the lease payments eTextbook and Media List of Accounts

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