Each of the four independent situations below describes a sales-type lease in which annual lease payments of $150,000 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 | 12% | 14% | 10% | 10% |
| Residual value: | | | | |
| Estimated fair value | 0 | $60,000 | $9,000 | $60,000 |
| Guaranteed by lessee | 0 | 0 | $9,000 | $70,000 |
| |
Determine the following amounts at the beginning of the lease: (Round your intermediate and final answer to the nearest whole dollar amount.)
Answer is not complete. Situation 1 2 3 4 The lessor's: .00 1.050.000 1,050,000 784,581 $ 1,050,000 1,110,000 $ 1,200,000 1,209,000 1. Lease payments 2. Gross investment in the lease 3. Net investment in the lease The lessee's: 4. Lease payments 5. Right-of-use asset 6. Lease liability 1,050,000 1,050,000 1,200,000 TABLE 6 Present Value of an Annuity Due of $1 PVAD = 11- (+Fx (1+) ni 1 2 3 4 5 1.0% 1.00000 1.99010 2.97040 3.94099 4.90197 1.5% 1.00000 1.98522 2.95588 3.91220 4.85438 2.0% 1.00000 1.98039 2.94156 3.88388 4.80773 2.5% 1.00000 1.97561 2.92742 3.85602 4.76197 3.0% 1.00000 1.97087 2.91347 3.82861 4.71710 3.5% 4.0% 4.5% 1.00000 1.00000 1.00000 1966181.96154 1.95694 2.899692.886092.87267 3.80164 3.775093.74896 4.67308 4.62990 4.58753 5.0% 1.00000 1.95238 2.85941 3.72325 4.54595 5.5% 1.00000 1.94787 2.84632 3.69793 4.50515 6.0% 1.00000 1.94340 2.83339 3.67301 4.46511 0.0% 1.00000 1.93458 2.80802 3.62432 4.38721 8.0% 0.0% 1.00000 1.00000 1.92593 1.91743 2.78326 2.75911 3.57710 3.53129 4.312134.23972 10.0% 11.0% 12.0% 20.0% 1.00000 1.00000 1.00000 1.00000 1.90909 1.90090 1.89286 1.83333 2.73554 2.71252 2.69005 2.52778 3.48685 3.44371 3.40183 3.10648 4.16987 4.10245 4.03735 3.58873 6 7 8 9 10 5.85343 5.78264 5.71346 6.795486.697196.60143 7.728197.59821 7.47199 8.65168 8.48593 8.32548 9.566029.36052 9.16224 5.64583 5.57971 5.51505 6.50813 6.417196.32855 7.349397.23028 7.11454 8.17014 8.01969 7.87396 897087 8.78611 8.60769 5.45182 6.24214 7.00205 7.73274 8.43533 5.38998 5.32948 6.157876.07569 6.89270 6.78637 7.59589 7.46321 8.26879 8.10782 5.27028 5.21236 5.10020 5.995535.91732 5.76654 6.68297 6.58238 6.38929 7.33457 7.209796.97130 7.95220 7.801697.51523 4.99271 4.88965 5.62288 5.48592 6.20637 6.03295 6.74664 6.53482 7.246896.99525 4.79079 4.69590 4.60478 3.99061 5.35526 5.23054 5.11141 4.32551 5.868425.71220 5.56376 4.60459 6.33493 6.14612 5.96764 4.83716 6.75902 6.53705 632825 5.03097 11 12 13 14 10.47130 10.22218 11.36763 11.07112 12.25508 11.90751 13.13374 12.73153 9.98259 9.75206 10.78685 10.51421 11.57534 11.25776 12.34837 11.98318 9.53020 10.25262 10.95400 11.63496 9.31661 10.00155 10.66333 11.30274 9.11090 9.76048 10.38507 10.98565 8.91272 8.72173 9.528929.30641 10.11858 9.86325 10.68285 10.39357 8.53763 9.09254 9.61852 10.11708 8.360098.02358 7.71008 8.88687 3.49867 8.13896 9.38384 8.942698.53608 9.85268 9.35765 8.90378 7.41766 7.80519 8.16073 8.48690 7.14457 6.88923 6.650225.19247 7.49506 7.20652 6.93770 5.32706 7.813697.49236 7.19437 5.43922 8.10336 7.74987 7.42355 5.53268 14.00370 13.54338 13.10625 12.69091 12.29607 11.9205211.56312 11.22283 10.89864 10.58965 10.29498 9.745479.24424 8.786158.366697.98187 7.62817 5.61057 16 14.86505 14.34323 13.84926 13.38138 12.93794 12.51741 12.11839 11.73955 11.37966 11.03758 10.71225 10.10791 9.55948 9.060698.60608 8.19087 7.81086 5.67547 17 15.71787 18 16.56225 19 17.39827 20 18.22601 15.13126 15.90765 16.67256 17.42617 14.57771 15.29187 15.99203 16.67846 14.05500 14.71220 15.35336 15.97889 13.56110 14.16612 14.75351 15.32380 13.09412 13.65132 14.18968 14.70984 12.65230 12.23402 11.83777 13.16567 12.70719 12.27407 13.65930 13.15999 12.68959 14.13394 13.59329 13.08532 11.46216 11.10590 11.86461 11.47726 12.24607 11.82760 12.60765 12.15812 10.44665 9.85137 10.76322 10.12164 11.05909 10.37189 11.33560 10.60360 9.31256 8.82371 8.37916 7.97399 5.72956 9.543639.02155 8.54879 8.119635.77463 9.75563 9.20141 8.70162 8.24967 5.81219 9.95011 9.36492 8.83929 8.36578 5.84350
