In SFAS 13:

(FV is Fair Value; RV is Residual Value; PV is present value, IIR is the Implicit Interest Rate)

If we assume that the FV = the sales or purchase price as it says is typical in section 5c

1) Paragraph 5K basically says that PV of minimum lease payments + RV = FV
2) Paragraph 17C basically says that PV of minimum lease payments = sales price
we get this:

PV(MLP) @IIR = purchase price = PV(MLP+RV)@IIR


What am I missing here?

Submit your question to the homework section please.

FYI/ this is not for homework, I have already graduated twice... This is for my professional career, I can not find an answer anywhere. Can anybody help?

Could you not see how that looked like a homework question. That's fine F- my reputation right. Hope someone else will help you because now I won't that's for sure.