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Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The
Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Situation 2 9 Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: 103 $55,000 $355,000 $80,000 470,000 $55,000 $355,000 $50,000 470,000 Estimated fair value Guaranteed fair value 0 55,000 $12,000 50,000 0 $12,000 55,000 Required a. & b. Determine the amount 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 above situations. (Round your PV factor answers to 5 decimal places and other answer to nearest whole dollar.) Right-of-use Asset/Lease Liability Residual Value Guarantee PV of Lease Payments PV of Residual Value Guarantee Lease Payments o55,000 $ Situation 1 Situation 2 Situation3 Situation 4 55,000 0 5,000 0
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