On January 1, 2010, Stanley Corp On January 1, 2010, Stanley Should Record a Debit to Direct

question 81

Multiple Choice

On January 1, 2010, Stanley Corp., a lessor, signed a direct financing lease.Stanley was to receive annual year-end payments of $8, 000 for ten years, after which there was a guaranteed residual value of $6, 000.The implicit interest rate was 8%.Actuarial information for 8%, ten periods follows: $\begin{array}{llr} \text {Present value of ordinary annuity of \( \$ 1 \) } &6.71008\\ \text {Present value of amount of \( \$ 1 \) } &0.46315\\\end{array}$
On January 1, 2010, Stanley should record a debit to Lease Receivable for

• A)$53, 680.64
• B)$56, 459.78
• C)$80, 000.00
• D)$86, 000.00

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Definitions:

Ordinary Annuity

Consistent payouts distributed at the conclusion of each cycle over an established length.

Deferred Annuity

An insurance product that provides future payments to the holder, starting at a designated date rather than immediately.

Ordinary Annuity

Identical sums disbursed following each period within an allotted timeframe.

Conditional Sale Contract

A contract agreement where the sale is contingent upon fulfilling certain conditions or terms.