Use the Information Below to Answer the Following Questions

question 168

Multiple Choice

Use the information below to answer the following questions.

On December 31, 2017, Reagan Inc. signed a lease with Silver Leasing Co. for some equipment having a seven-year useful life. The lease payments are made by Reagan annually, beginning at signing date. Title does not transfer to the lessee, so the equipment will be returned to the lessor on December 31, 2023. There is no purchase option, and Reagan guarantees a residual value to the lessor on termination of the lease.

Reagan's lease amortization schedule appears below:


-What is the amount of residual value guaranteed by Reagan to the lessor?

• A) $1,385.
• B) $34,615.
• C) $36,000.
• D) Cannot be determined from the given information.

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Definitions:

Specified Territory

A clearly defined geographic or conceptual area designated for a specific purpose or assigned to a person or entity.

Transnational Companies

Corporations that operate and have assets in more than one country, often managing production and delivering services in various international locations.

Global Strategies

Plans developed by organizations to operate and compete on a worldwide scale, taking advantage of global opportunities and managing global challenges.

Circumstances

The specific conditions or facts affecting a situation or event at a particular time.