Question
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $110,000 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 $110,000 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 $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
| Situation | ||||||
| 1 | 2 | 3 | 4 | |||
| Lease term (years) | 7 | 7 | 8 | 8 | ||
| Lessor's and lessee's interest rate | 9% | 11% | 10% | 12% | ||
| Residual value: | ||||||
| Estimated fair value | 0 | $52,000 | $8,200 | $52,000 | ||
| Guaranteed by lessee | 0 | 0 | $8,200 | $62,000 | ||
Determine the following amounts at the beginning of the lease: (Round your intermediate and final answer to the nearest whole dollar amount.)
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
