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Plessings Company Leased a Piece of Machinery to Banana, Inc

question 40

Essay

Plessings Company leased a piece of machinery to Banana, Inc. on January 1, 2019. The lease is correctly classified as a sales-type lease. Plessings will receive three annual lease payments of $20,000, with the first one received on January 1, 2019. There is no guaranteed or unguaranteed residual value. The fair value of the machine is $50,000 and Plessings incurs initial direct costs of $5,000. Compute the implicit rate assuming the initial direct costs are deferred.

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Definitions:

Distributive Justice

concerns the fair allocation of resources and rewards among individuals in a society or group, based on principles of equity.

Conflict

A situation or process in which individuals, groups, or organizations have disagreements, disputes, or incompatibilities, often leading to a confrontation.

Bilateral Threat

A situation where two parties perceive each other as potential threats, often leading to escalated tensions or conflict.

Unilateral Threat

This term describes a situation where one party threatens to take action independent of others' preferences or actions.

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