Business, 02.04.2021 01:00 hey840

1. On January 1, 2020, ABC Lessee leased equipment from Valley Equipment Lessor at a price of $360,376. Sun Equipment Lessor has a cost in the inventory of $288,376. The lease agreement specifies 5 annual payments beginning January 1st 2020, the inception of the lease, and on each January 1st thereafter through 2024. The 5 year lease term ends on December 31, 2024. Sun Equipment Lessor estimates the useful life of the equipment to be 5 years. The residual value is estimated to be $0. The lease does not contain a renewal or purchase option, and the equipment reverts to the Lessor at the end of the 5 year period. Valley Equipment Lessor routinely leases its inventory to customers. The implicit interest in their contracts is 9%, and ABC Lessee is aware of this rate. ABC Lessee depreciates assets using the Straight-Line method for Depreciation. a. How will the lease be classified by the Lessor and Lessee

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1. On January 1, 2020, ABC Lessee leased equipment from Valley Equipment Lessor at a price of $360,3...