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Question: fireval machine works co signs an agreement on jan 1...

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Fireval Machine Works Co. signs an agreement on Jan 1, 2018, to lease equipment to Reid company. the following information relates to the agreement:

>The term of the noncancable lease is 5 years with no renewal option. The equipment has an estimated economic life of 6 years

>the agrrement requires equal semi-annual payments, beginning on Jan 1, 2018.

>The cost of the asset of the lessor is 350,000. The fair value of the asset at Jan 1, 2018 is 450,000.

>The asset will revert ti the lessor at the end of the lease term at which time the asset is expected to have a residual value of $ 75,000 None of which is Guaranteed

Required:

Assuming the lessor desires a 10% return calculate the amount of the required rental payment. Round to nearest dollar, Show all calculations.

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