Question

Assume that IBM leased equipment that was carried at a cost of 120,000 to Swander Co. The term of the lease is 6 years beginning 12/31/24 with equal rental payments of30,044. What is the total amount of rental payments over the term of the lease?

1) $180,264
2) $180,264.24
3) $180,264.48
4) $180,264.72

Answer 1

The total amount of rental payments over the 6-year lease term is $180,264, calculated by multiplying the annual payment of $30,044 by 6.

Step-by-step explanation:

The question is asking to calculate the total amount of rental payments over the term of a lease agreement. Given that there are equal annual payments of $30,044 over a 6-year lease period, the calculation involves simply multiplying the annual payment amount by the number of years:

Rental payments = Annual payment × Number of years

Rental payments = $30,044 × 6

Rental payments = $180,264

Therefore, the total amount of rental payments over the term of the lease is $180,264.