Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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.) Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value 1 5 10% $ 67,000 $67,000 Situation 2 3 8 6 11% 9% $367,000 $ 92,000 $367,000 $ 62,000 4 9 12% $482,000 $482,000 0 0 $ 67,000 0 $ 24,000 $ 24,000 $ 36,000 $ 41,000 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 each of the above situations. (Round your answers to the nearest whole dollar amount.) Lease Payments Residual Value Guarantee PV of Lease Payments PV of Residual Value Guarantee Right-of-use Asset/Lease Liability $ Situation 1 0 Situation 2 $ 0 Situation 3 $ 0 Situation 4 $ 0 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.) Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value 1 5 10% $ 67,000 $67,000 Situation 2 3 8 6 11% 9% $367,000 $ 92,000 $367,000 $ 62,000 4 9 12% $482,000 $482,000 0 0 $ 67,000 0 $ 24,000 $ 24,000 $ 36,000 $ 41,000 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 each of the above situations. (Round your answers to the nearest whole dollar amount.) Lease Payments Residual Value Guarantee PV of Lease Payments PV of Residual Value Guarantee Right-of-use Asset/Lease Liability $ Situation 1 0 Situation 2 $ 0 Situation 3 $ 0 Situation 4 $ 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Performance Audit Department Of Highways Preconstruction And Construction Activities

Authors: Montana. Legislature. Office Of The Legi

1st Edition

1175365823, 978-1175365828

More Books

Students also viewed these Accounting questions

Question

Explain the importance of Human Resource Management

Answered: 1 week ago

Question

Discuss the scope of Human Resource Management

Answered: 1 week ago

Question

Discuss the different types of leadership

Answered: 1 week ago

Question

Write a note on Organisation manuals

Answered: 1 week ago

Question

Define Scientific Management

Answered: 1 week ago