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Business, 27.02.2020 23:48 sandy461

On December 31, 2016, Burke Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Burke to make annual payments of $8,668 at the beginning of each year, starting December 31, 2016. The machine has an estimated useful life of 6 years and a $5,000 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Burke uses the straight-line method of depreciation for all of its plant assets. Burke’s incremental borrowing rate is 5%, and the lessor’s implicit rate is unknown. What type of lease is this?

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On December 31, 2016, Burke Corporation signed a 5-year, non-cancelable lease for a machine. The ter...
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