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Starboard Industries enters into a lease agreement with Bumble Motors to lease an automobile with a fair value of $73,000 under a 5-year lease on December 20, 2018. The lease commences on January 1, 2019, and Starboard will return the automobile to Bumble on December 31, 2023. The automobile has an estimated useful life of 7 years. Starboard made a lease payment of $10,400 on December 20, 2018. In addition, the lease agreement stipulates annual payments of $10,400, due on January 1 of 2019, 2020, 2021, 2022, and 2023. The implicit rate of the lease is 5% and is known by Starboard. Starboard guarantees a residual value of $4,500 and incurs initial direct costs of $1,600. Assuming that this is classified as an operating lease, what is the value of the right-of-use asset at the lease's commencement?
Desire
A strong feeling of wanting to have something or wishing for something to happen.
Manager
An individual responsible for controlling or administering all or part of a company or similar organization.
Reward Power
The capacity to offer something of value as a means to influence the behavior of others.
Influence
The capacity to have an effect on the behavior, development, or character of someone or something.
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