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XYZ Rental Leased a Special Crane to ABC INC

Question 191

Multiple Choice

XYZ Rental leased a special crane to ABC INC.that originally cost $40,000.The lease was for six years and the rentals were $10,000 per year, payable at each year-end.The implicit interest rate was 10 percent.XYZ Rental recognized a gross margin (dealer's profit) of (rounded to nearest dollar) :


A) $4,000
B) $24,000
C) $3,553
D) $20,000

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