Accounting help!
Help: Can someone please write down/do the math of how to get to the answers marked in red?
Info Given:
Answers Given: Please help calculate to get those answers!
The lease term is 3 years with no renewal or purchase options, and title to the underlying asset is retained by the lessor at the end of the lease term. The lease requires annual fixed rental payments of $24,600 per year on July 1 of each year. The first payment occurs on July 1, 2019, at the lease commencement. The fair value of the equipment is $99,125 and had a carrying amount on Crane's books of $75,800. The equipment has a remaining life of 6 years. The estimated residual value of the equipment is $30,000. The lessee does not guarantee the residual value, but Crane secured an unrelated third party guarantee of $25,000, and the collection of this guaranteed residual is probable. The rate implicit in the lease is 3%. Crane's fiscal year ends on December 31. There are no prepaid rentals, and neither party to the agreement pays initial direct costs. Now compute the present value of the lease payments for the lessor for assessing the Group II criteria. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculation. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answer to the nearest whole dollar.) The present value (PV) of the payments for the lessor in assessing the Group Il criteria is $ 94,550 Next identify any Group Il criteria that the lease meets. (Select all that apply. If the Group Il criteria do not need to be assessed based on the results from Group I, please select that choice and leave all other choices blank.) Group II Criteria: 1. The present value of the sum of the lease payments and any residual value the lessee or a third party guarantees to pay is equal to substantially all of the asset's fair value. 2. It is probable that the lessor will collect the lease payments plus any amount necessary to satisfy a residual value guarantee. 3. The lease does not meet any Group II lease criteria. 4. The Group II lease criteria do not need to be assessed due to the lease meeting the Group I criteria. This is a(n) direct-financing lease for the lessor because none of the Group I criteria is(are) met and both of the Group II criteria is(are) met. Requirement b. Provide all journal entries for the lessor for 2019 and 2020. Show all supporting computations. First, calculate the present value of the unguaranteed residual value. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculation. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your answer to the nearest whole dollar.) The present value of the unguaranteed residual value is $ 4,576 Calculate the selling profit or loss. (Round your answer to the nearest whole dollar.) The selling profit is $ 23,326. Next, compute the constant rate of return on the net investment in lease. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculation. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Enter your answer as a percentage rounded to five decimal places, X.XXXXX%.) The constant rate of return on the net investment in the lease is 24.469 %. Prepare the amortization table for the lease. (Complete all answer boxes. For interest calculations, use interest rates rounded to five decimal places, X.XXXXX% and round your final answers to the nearest whole dollar. Enter a "O" for any zero balances.) IL . . . Prepare the amortization table for the lease. (Complete all answer boxes. For interest calculations, use interest rates rounded to five decimal places, X.XXXXX% and round your final answers to the nearest whole dollar. Enter a "0" for any zero balances.) Interest Reduction in Balance of Date Payment Expense Lease Liability Lease inception July 1, 2019 July 1, 2020 July 1, 2021 Residual value 24,600 $ 24,600 24,600 30,000 Lease Liability 75,800 51,200 39,128 24,102 24,600 12,072 15,026 24,102 12,5289 9,574' 5,898 Now prepare the journal entry that Crane will use to record the lease on the commencement date, July 1, 2019. Exclude the first annual lease payment from this entry. (Record debits first, then credits. Exclude explanations from any journal entries.)
