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(Solved): Kingbird Leasing Company signs a lease agreement on January 1, 2025, to lease electronic equipment t ...



Kingbird Leasing Company signs a lease agreement on January 1, 2025, to lease electronic equipment to Blossom Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement. 1. Blossom has the option to purchase the equipment for $26,000 upon termination of the lease. It is not reasonably certain that Blossom will exercise this option. 2. The equipment has a cost of $320,000 and fair value of $376,000 to Kingbird Leasing. The useful economic life is 2 years, with a residual value of $26,000. 3. Kingbird Leasing desires to earn a return of 6% on its investment. 4. Collectibility of the payments by Kingbird Leasing is probable.



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