Business, 19.03.2020 09:28 shod74

On December 31, 2018, Perry Corporation leased equipment to Admiral Company for a five-year period.

The annual lease payment, excluding nonlease components, is $42,000.

The interest rate for this lease is 11%.

The payments are due on December 31 of each year.

The first payment was made on December 31, 2018.

The normal cash price for this type of equipment is $155,000 while the cost to Perry was $134,000.

For the year ended December 31, 2018, by what amount will Perry's earnings increased due to this lease (ignore taxes)?

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On December 31, 2018, Perry Corporation leased equipment to Admiral Company for a five-year period....