On January 1, 2015, Day Corp. entered into a 10-year lease agreement with Ward, Inc. for industrial equipment. Annual lease payments of $10,000 are payable at the end of each year. Day knows that the lessor expects a 10 percent return on the lease. Day has a 12 percent incremental borrowing rate. The equipment is expected to have an estimated useful life of 10 years. In addition, a third party has guaranteed to pay Ward a residual value of $5,000 at the end of the lease.

The present value of an ordinary annuity of $1 at

12% for 10 years is 5.6502

10% for 10 years is 6.1446

The present value of $1 at

12% for 10 years is 0.3220

10% for 10 years is 0.3855

On Day’s October 31, 2015, balance sheet, the principal amount of the lease obligation was





Needs help with similar assignment?

We are available 24x7 to deliver the best services and assignment ready within 3-12hours? Order a custom-written, plagiarism-free paper

Get Answer Over WhatsApp Order Paper Now

Do you have an upcoming essay or assignment due?

All of our assignments are originally produced, unique, and free of plagiarism.

If yes Order Paper Now