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Question 16Q

Intermediate Accounting (Kieso)
Found in: Page 301

Short Answer

Alexander Enterprises leases property to Hamilton, Inc. Because Hamilton is experiencing financial difficulty, Alexander agrees to receive five rents of $20,000 at the end of each year, with the rents deferred 3 years. What is the present value of the five rents discounted at 12%?

The present value of five rents received is $51,316.2.

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Step by Step Solution

Definition of lease

A lease is defined as the contract outlining the terms under which a party agrees to rent an asset such as property or machine by another party.

Computation of present value of five rents

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