Business, 13.05.2021 20:40 jeremyrs101

Crane Corporation enters into an agreement with Yates Rentals Co. on January 1, 2021 for the purpose of leasing a machine to be used in its manufacturing operations. The following data pertain to the agreement: a. The term of the noncancelable lease is 3 years with no renewal option. Payments of $362436 are due on January 1 of each year.
b. The fair value of the machine on January 1, 2021, is $1000000. The machine has a remaining economic life of 10 years, with no salvage value. The machine reverts to the lessor upon the termination of the lease.
c. Alt depreciates all machinery it owns on a straight-line basis.
d. Alt's incremental borrowing rate is 10% per year. Alt does not have knowledge of the 8% implicit rate used by Yates.
e. Immediately after signing the lease, Yates finds out that Alt Corp. is the defendant in a suit which is sufficiently material to make collectibility of future lease payments doubtful.

Required:
If Yates records this lease as a direct-financing lease, what amount would be recorded as Lease Receivable at the inception of the lease?

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Crane Corporation enters into an agreement with Yates Rentals Co. on January 1, 2021 for the purpose...