Question
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $17,000 are payable at the beginning of each
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $17,000 are payable at the beginning of each year. Each is a finance lease for the lessee. (FV of $1,PV of $1,FVA of $1,PVA of $1,FVAD of $1andPVAD of $1)(Use appropriate factor(s) from the tables provided.)
Situation1234Lease term (years)2222Asset's useful life (years)2335Lessor's implicit rate (known by lessee)9%9%9%9%Residual value:Guaranteed by lessee0$6,800$3,4000Unguaranteed00$3,400$6,800Purchase option:After (years)none123Exercise pricen/a$8,400$2,400$4,400Reasonably certain?n/anonoyes
Determine the following amounts at the beginning of the lease:(Round your final answers to nearest whole dollar.)
A. The lessor's
- Total lease payments ___________ ___________ _____________ _______________
- gross investment in the lease ____________ _____________ ____________ ____________
- net investment in the lease ________ ____________ __________ __________
B. The lessee's
- Total lease payments______________ _____________ ___________ ___________
- Right of use asset_____________ _______________ ____________ ______________
- Lease liability _____________ ______________ ______________ _______________
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