Governor Corporation entered into a direct financing lease (interest rate 12 percent)to lease Pleasant an asset that cost Governor $90,000.The lease specified annual year-end payments for seven years.The lease also specified that,along with the last payment,Pleasant could purchase the asset for $8,000 cash.Under this lease agreement,Pleasant will be required to pay annual payments of
A) $11,714.
B) $12,858.
C) $17,966.
D) $18,928.

Question

Quizplus · Accepted Answer

The Answer of Governor Corporation entered into a direct financing lease (interest rate 12 percent)to lease Pleasant an asset that cost Governor $90,000.The lease specified annual year-end payments for seven years.The lease also specified that,along with the last payment,Pleasant could purchase the asset for $8,000 cash.Under this lease agreement,Pleasant will be required to pay annual payments of
A) $11,714.
B) $12,858.
C) $17,966.
D) $18,928.

Governor Corporation Entered into a Direct Financing Lease (Interest Rate