An Asset with a Market Value of $100,000 Is Leased

question 33

Multiple Choice

An asset with a market value of $100,000 is leased on January 1,2014.Five annual lease payments are due each January 1 beginning January 1,2014.The lessee guarantees the $40,000 residual value of the asset as of the end of the lease term on December 31,2018.The lessor's implicit interest rate is 8%. What is the annual lease payment?

• A) $18,227
• B) $16,877
• C) $23,191
• D) $25,046

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