Pralow, Inc, leased an asset to Bender Corporation. The cost of the asset to Pralow was $8,000 . Terms of the lease specify four-year life for the lease, an annual interest rate of 1 . percent, and four year-end rental payments. The lease qualifies as a capital lease and is classified as a direct-financing lease. The asset reverts to Pralow after the fourth year, when its residual value is
estimated to be $1,000 . The amount of each rental payment is
a. $2,000.
b. $2,335.
c. $2,501.
d. $2,602.
D
Business
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