MBI Company's largest computer has a cash selling price of $200,000. A customer wishes to buy the computer on a lease purchase plan over five years, with the first payment to be made at the inception of the lease. Interest is at 10%.
Required:
a. Compute the amount of the annual lease payment and the gross amount due (total payments) under the lease.
b. Compute the amount of interest income earned by MBI for the first year of the lease.

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The Answer of MBI Company's largest computer has a cash selling price of $200,000. A customer wishes to buy the computer on a lease purchase plan over five years, with the first payment to be made at the inception of the lease. Interest is at 10%.
Required:
a. Compute the amount of the annual lease payment and the gross amount due (total payments) under the lease.
b. Compute the amount of interest income earned by MBI for the first year of the lease.

MBI Company's Largest Computer Has a Cash Selling Price of $200,000