Exhibit 20-3
On January 1, 2016, Quinn Company enters into a five-year sales-type lease with Andy Company. The lease requires Andy to make five annual payments at the beginning of the year, with the first payment due January 1,2016. The lease includes a bargain purchase price of $10,000. Quinn requires a 10% rate of return. The cost to Quinn of the property is $100,000, and it has a fair value of $150,000. Present value factors for a 10% interest rate are as follows:

-Refer to Exhibit 20-3. What is the amount of the annual lease payment Quinn would require round the answer to the nearest dollar)?

Question

Exhibit 20-3
On January 1, 2016, Quinn Company enters into a five-year sales-type lease with Andy Company. The lease requires Andy to make five annual payments at the beginning of the year, with the first payment due January 1,2016. The lease includes a bargain purchase price of $10,000. Quinn requires a 10% rate of return. The cost to Quinn of the property is $100,000, and it has a fair value of $150,000. Present value factors for a 10% interest rate are as follows:

-Refer to Exhibit 20-3. What is the amount of the annual lease payment Quinn would require round the answer to the nearest dollar)?

Quizplus · Accepted Answer

The Answer of Exhibit 20-3
On January 1, 2016, Quinn Company enters into a five-year sales-type lease with Andy Company. The lease requires Andy to make five annual payments at the beginning of the year, with the first payment due January 1,2016. The lease includes a bargain purchase price of $10,000. Quinn requires a 10% rate of return. The cost to Quinn of the property is $100,000, and it has a fair value of $150,000. Present value factors for a 10% interest rate are as follows:

-Refer to Exhibit 20-3. What is the amount of the annual lease payment Quinn would require round the answer to the nearest dollar)?

Exhibit 20-3 On January 1, 2016, Quinn Company Enters into a Five-Year