Answered step by step
Verified Expert Solution
Question
1 Approved Answer
answer both plz!!! At January 1.2024, Caf Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. - The lease agreement specifles annual
answer both plz!!!
At January 1.2024, Caf Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. - The lease agreement specifles annual payments of $26,000 beginning January 1, 2024, the beginning of the lease, and on each December 31 thereafter through 2031. - The equipment was acquired recently by Crescent at a cost of $180.000 (its fair value) and was expected to have a useful ufe of 13 years with no salvage value at the end of its life. Crescent records depreciation using the straightline method. - Because the lease term is only nine years, the asset does have an expected residual value at the end of the lease term of $21,925. - Crescent seeks a 9% return on its lease investments. By this arrangement, the lease is deemed to be an operating lease. Note: Use tables, Excel, or a financlal calculator. (PV of S1, PV of S1, BVA of S1, PVA of S1, FVAD of S1 and PVAD of S1) Required: 1. What will be the effects of the lease on Crescent's (lessor's) eamings for the first year (ignore taxes)? Note: Enter decreases with negative sign. 2. What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Crescent fignore taxes)? Note: For all requirements, round your intermediate calculations to the nearest whole dollar amount. Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end of each year. The lessee is aware of the lessor's implicit rate of return. Note: Use tables, Excel, or a financial calculatos, (EV of \$1, PV of S1. PVA of S1. PVA of S1, EVAD of S1 and PVAD of S1) Required: a. \& b. Determine the arnount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest whole dollar Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started