Question
Divided Skies (the Company) leases aircraft, airport passenger terminal space, aircraft hangars and related maintenance facilities, cargo terminals, other airport facilities, real estate, oce and
Divided Skies (the Company) leases aircraft, airport passenger terminal space, aircraft hangars and related maintenance facilities, cargo terminals, other airport facilities, real estate, oce and computer equipment, and vehicles. Portions of the Divided Skies liability section of its Year 8 annual report and portions of Note 10 (adapted) are provided below.
Balance Sheet Liabilities at Dec. 31, $ millions | Year 8 | Year 7 |
---|---|---|
Current obligations under finance leases | $229 | $222 |
Long-term obligations under finance leases | 2,747 | 2,183 |
Note 10: Lease Obligations Payable during, $ millions | Finance Leases |
---|---|
Year 9 | $412 |
Year 10 | 400 |
Year 11 | 519 |
Year 12 | 443 |
Year 13 | 315 |
After Year 13 | 2,287 |
Total lease payments | 4,376 |
Imputed interest (at rates of 5.3% to 12.2%) | (1,400) |
Lease liability | 2,976 |
Current portion | (229) |
Long-term obligations under finance leases | $2,747 |
The statement of cash ows reports principal payments under nance lease obligations of $419 million.
Required
a. What was the value of the equipment acquired under finance lease obligations in Year 8? Value of equipment acquired: $Answer million.
b. What principal was paid on these new leases in Year 8? Note: Do not use a negative sign with your answer. Pricipal payments on new leases: $Answer million.
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