Carrying amount of airplane at date of sale
Monthly rental under lease
Interest rate implicit in the lease as computed by Edlow and known by Parke (this rate is lower than the lessee’s incremental borrowing rate)
Present value of operating lease rentals ($6,330 for 36 months @ 12%)
The leaseback is considered an operating lease. In Parke’s December 31, 2006 balance sheet, what amount should be included as deferred revenue on this transaction?
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