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Homework answers / question archive / Skysong Company leases equipment for 8 years with an annual rental of $2,400 per year or $19,200 in total

Skysong Company leases equipment for 8 years with an annual rental of $2,400 per year or $19,200 in total

Accounting

Skysong Company leases equipment for 8 years with an annual rental of $2,400 per year or $19,200 in total. General Leasing (the lessor) agrees to provide Skysong with $200 for the first 2 years of the lease to defray needed repairs to the equipment.

 

Determine the total lease payments that Skysong will pay for the first 3 years of the lease agreement.

 

Lease payments

$enter the total lease payments in dollars

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Computation of Total Lease Payments that Skysong will pay for the first 3 years of the lease agreement:

Lease payment for first 2 years = Annual Rental - Receipt from Lesser for Repairs

= $2,400 - $200

= $2,200 per year

 

Lease payment for 3rd year = $2,400

 

Lease payment to be paid by Skyson for first 3 years = $2,200+$2,200+$2,400 = $6,800

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