The lease agreement specifies annual payments of $26,000 beginning January 1,2024, the beginning of the...
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Accounting
The lease agreement specifies annual payments of $ beginning January the beginning of the lease, and on each December thereafter through
The equipment was acquired recently by Crescent at a cost of $its fair value and was expected to have a useful life of years with no salvage value at the end of its life.
Because the lease term is only nine years, the asset does have an expected residual value at the end of the lease term of $
Both a the present value of the lease payments and b the present value of the residual value ie the residual asset are included in the lease receivable because the two amounts combine to allow the lessor to recover its net investment.
Crescent seeks a return on its lease investments.
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