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BUS_A 312 #15 - Assuming that the lease is appropriately...

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Eby Company leased equipment to the Mills Company on July 1, 2008, for a ten-year period expiring June 30,  2018. Equal annual payments under the lease are $80,000 and are due on July 1 of each year. The first  payment was made on July 1, 2008. The rate of interest contemplated by Eby and Mills is 9%. The cash selling  price of the equipment is $560,000 and the cost of the equipment on Eby's accounting records was $496,000. 
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Unformatted text preview: Assuming that the lease is appropriately recorded as a sale for accounting purposes by Eby, what is the amount of profit on the sale and the interest revenue that Eby would record for the year ended December 31, 2008? a. $64,000 and $50,400 b. $64,000 and $43,200 c. $64,000 and $21,600 d. $0 and $0...
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