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:

Exporting

The process of sending goods or services to another country for sale.

Port of Contact

A port or harbor where goods, services, and cultural exchanges occur, serving as a point of entry and interaction for different regions or countries.

American Traders

Individuals or entities involved in the commerce of goods and services within the United States, playing a role in both domestic and international trade.

Distinctly American Character

Unique qualities or cultural aspects that define the identity of the United States, including individualism, freedom, and diversity.