Leicester Ltd leases equipment to Wentworth Company that was carried at a cost of £200,000 and also has a fair value at the inception of the lease of £200,000.All executory costs are paid by Wentworth directly to third parties.The equipment has a useful life of 6 years with no residual value.The lease has an implicit interest rate of 8%, no bargain purchase option, and no transfer of title.The term of the lease is 6 years beginning January 1, 2012.Based on this information, what are the equal rental payments due at the beginning of each year (to the nearest pound)?
A)£99,854
B)£40,058
C)£33,333
D)£16,000

Question

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The Answer of Leicester Ltd leases equipment to Wentworth Company that was carried at a cost of £200,000 and also has a fair value at the inception of the lease of £200,000.All executory costs are paid by Wentworth directly to third parties.The equipment has a useful life of 6 years with no residual value.The lease has an implicit interest rate of 8%, no bargain purchase option, and no transfer of title.The term of the lease is 6 years beginning January 1, 2012.Based on this information, what are the equal rental payments due at the beginning of each year (to the nearest pound)?

Leicester Ltd Leases Equipment to Wentworth Company That Was Carried