Daniels Company Entered into a Direct-Financing Lease with Old 7

question 76

Multiple Choice

Daniels Company entered into a direct-financing lease with Old 7 Corporation,which called for seven annual rentals of $3,500 at an interest rate of 12 percent.The payments are to be paid at the end of each year.The lease also contained a bargain purchase option allowing Old 7 to purchase the asset for $2,500 after making the seventh annual rental payment. What was the cost of the asset?

• A) $17,104
• B) $18,473
• C) $25,631
• D) $27,000

---

Definitions:

Alcohol Abuse

The harmful consumption of alcohol that leads to negative health, social, or legal consequences.

Hypnotically Suggestible

Referring to the extent to which individuals can be induced into a hypnotic state, often resulting in heightened suggestibility.

Psychological Dependence

A psychological need to use a drug, such as to relieve negative emotions.

Hypnotically Suggestible

Referring to the extent to which an individual is likely to respond to suggestions made during hypnosis.