Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end of each year. The lessee is aware of the lessor's implicit rate of return. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Situation 2 3 Lease term (years) Lessor's rate of return (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset 10 11% 12% 20 4 9% 12% 10% 10% $600,000 $980,000 $185,000 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. Note: Round your answers to the nearest whole dollar. Lease Payments Right-of-use Asset/Lease Payable Situation 1 Situation 2 Situation 3 Table 1 Future value of $1 FV = $1(1+i)" n/i 1.0% 1.5% 1 1.01000 1.01500 2 1.02010 1.03022 2.0% 1.02000 1.04040 2.5% 1.02500 1.05063 3.0% 1.03000 1.06090 3.5% 4.0% 1.03500 1.04000 4.5% 1.04500 5.0% 1.05000 5.5% 1.05500 6.0% 1.06000 1.07123 1.08160 1.09203 3 1.03030 1.04568 1.06121 1.07689 1.09273 1.10872 1.12486 1.14117 1.10250 1.15763 1. 11303 1.12360 7.0% 1.07000 1.14490 8.0% 1.08000 1.16640 9.0% 1.09000 1.18810 1.17424 1.19102 1.22504 1.25971 1.29503 10.0% 1.10000 1.21000 1.33100 11.0% 1.11000 1.23210 12.0% 1.12000 1.25440 20.0% 1.20000 1.44000 1.36763 1.40493 1.72800 4 1.04060 1.06136 1.08243 1.10381 1.12551 1.14752 1.16986 1.19252 1.21551 1.23882 1.26248 1.31080 1.36049 1.41158 1.46410 1.51807 1.57352 2.07360 5 1.05101 1.07728 1.10408 1.13141 1.15927 1.18769 1.21665 1.24618 1.27628 1.30696 1.33823 1.40255 1.46933 1.53862 1.61051 1.68506 1.76234 2.48832 6 1.06152 1.09344 1.12616 1.15969 1.19405 1.22926 1.26532 1.30226 1.34010 1.37884 1.41852 1.50073 1.58687 1.67710 1.77156 1.87041 1.97382 2.98598 7 1.07214 1.10984 1.14869 1.18869 1.22987 1.27228 1.31593 1.36086 1.40710 1.45468 1.50363 1.60578 1.71382 1.82804 1.94872 2.07616 2.21068 3.58318 8 1.08286 1.12649 1.17166 1.21840 1.26677 1.31681 1.36857 1.42210 1.47746 9 1.09369 1.14339 10 1.10462 1.16054 1.19509 1.21899 1.24886 1.30477 1.36290 1.42331 1.48610 1.55133 1.53469 1.61909 1.59385 1.71819 1.85093 1.99256 2.14359 2.30454 2.47596 4.29982 1.68948 1.83846 1.28008 1.34392 1.41060 1.48024 1.55297 1.62889 11 1.11567 1.17795 1.24337 12 1.12683 1.19562 1.26824 131209 1.34489 1.38423 1.45997 1.53945 1.62285 1.71034 1.70814 1.80209 1.79085 1.96715 1.99900 2.15892 2.17189 2.35795 2.55804 2.77308 5.15978 2.36736 1.89830 2.10485 2.33164 2.58043 1.42576 1.51107 1.60103 1.69588 1.79586 1.90121 2.01220 2.25219 2.51817 2.81266 2.59374 2.85312 3.13843 2.83942 3.10585 6.19174 3.15176 3.47855 7.43008 3.49845 13 1.13809 1.21355 14 1.14947 1.23176 15 1.16097 1.25023 16 1.17258 1.26899 1.29361 1.31948 1.34587 1.37279 1.37851 1.46853 1.56396 1.41297 1.51259 1.44830 1.55797 1.66507 1.77220 1.88565 2.00577 2.13293 2.40985 2.71962 3.06580 3.45227 1.61869 1.73168 1.85194 1.97993 2.11609 2.26090 2.57853 2.93719 3.34173 3.79750 3.88328 4.31044 1.67535 1.80094 1.93528 2.07893 2.23248 2.39656 2.75903 3.17217 3.64248 4.17725 1.48451 1.60471 1.73399 1.87298 2.02237 2.18287 2.35526 2.54035 2.95216 17 1.18430 1.28802 1.40024 1.52162 1.65285 1.79468 1.94790 2.11338 2.29202 2.48480 2.69277 3.15882 3.42594 3.70002 3.97031 4.59497 4.32763 5.05447 4.78459 5.31089 5.89509 3.89598 4.36349 4.88711 5.47357 8.91610 10.69932 12.83918 15.40702 6.13039 18.48843 6.86604 22.18611 18 1.19615 1.30734 1.42825 1.55966 1.70243 1.85749 2.02582 2.20848 2.40662 2.62147 2.85434 3.37993 19 1.20811 1.32695 1.45681 1.59865 1.75351 1.92250 2.10685 2.30786 2.52695 2.76565 3.02560 3.99602 4.31570 4.71712 5.55992 6.54355 5.14166 20 1.22019 1.34686 1.48595 1.63862 1.80611 1.98979 21 1.23239 1.36706 1.51567 1.67958 1.86029 2.05943 2.19112 2.27877 2.41171 2.65330 2.91776 3.20714 4.66096 5.60441 2.52024 25 1.28243 1.45095 1.64061 1.85394 2.09378 2.36324 2.66584 30 1.34785 1.56308 1.81136 2.09757 2.42726 2.80679 3.24340 40 1.48886 1.81402 2.20804 2.68506 3.26204 3.95926 4.80102 3.00543 3.74532 5.81636 2.78596 3.07823 3.38635 4.32194 7.03999 3.39956 3.81339 4.29187 4.98395 5.74349 8.51331 10.28572 6.10881 3.61653 3.86968 4.14056 5.03383 5.42743 6.84848 7.61226 10.06266 13.26768 17.44940 22.89230 29.95992 14.97446 21.72452 31.40942 45.25926 65.00087 93.05097 6.11591 7.26334 6.72750 8.06231 7.40025 8.94917 10.80385 8.62308 10.83471 13.58546 17.00006 7.68997 8.61276 9.64629 26.62333 31.94800 38.33760 46.00512 95.39622 237.37631 1469.77160 Table 3 Future Value of an Ordinary Annuity of $1 FVA = ((1+i) - 1)/i n/i 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5 % 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 1 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 2 2.0100 2.0150 2.0200 2.0250 2.0300 2.0350 2.0400 2.0450 2.0500 2.0550 2.0600 2.0700 2.0800 2.0900 2.1000 2.1100 2.1200 2.2000 3 3.0301 3.0452 3.0604 3.0756 3.0909 3.1062 3.1216 3.1370 3.1525 3.1680 3.1836 3.2149 3.2464 3.2781 3.3100 3.3421 3.3744 3.6400 4 4.0604 4.0909 4.1216 4.1525 4.1836 4.2149 4.2465 4.2782 4.3101 4.3423 4.3746 4.4399 4.5061 4.5731 4.6410 4.7097 4.7793 5.3680 5 5.1010 5.1523 5.2040 5.2563 5.3091 5.3625 5.4163 5.4707 5.5256 5.5811 5.6371 5.7507 5.8666 5.9847 6.1051 6.2278 6.3528 7.4416 6 6.1520 6.2296 6.3081 6.3877 6.4684 6.5502 6.6330 6.7169 6.8019 6.8881 6.9753 7.1533 7.3359 7.5233 7.7156 7.9129 8.1152 9.9299 7 7.2135 7.3230 7.4343 7.5474 7.6625 7.7794 7.8983 8.0192 8.1420 8.2669 8.3938 8.6540 8.9228 9.2004 9.4872 9.7833 10.0890 12.9159 8 8.2857 8.4328 8.5830 8.7361 8.8923 9.0517 9.2142 9.3800 9.5491 9.7216 9 9.3685 9.5593 9.7546 9.9545 10.1591 10.3685 10.5828 10.8021 11.0266 11.2563 9.8975 11.4913 10.2598 10.6366 11.0285 11.4359 11.8594 12.2997 16.4991 11.9780 12.4876 10 10.4622 10.7027 10.9497 11.2034 11.4639 11.7314 12.0061 12.2882 12.5779 12.8754 13.1808 13.8164 14.4866 13.0210 15.1929 13.5795 14.1640 14.7757 20.7989 15.9374 16.7220 17.5487 25.9587 11 11.5668 11.8633 12.1687 12.4835 12.8078 13.1420 13.4864 13.8412 14.2068 14.5835 14.9716 15.7836 16.6455 17.5603 18.5312 19.5614 20.6546 32.1504 12 12.6825 13.0412 13.4121 13.7956 14.1920 14.6020 15.0258 15.4640 15.9171 16.3856 16.8699 17.8885 18.9771 20.1407 21.3843 22.7132 24.1331 39.5805 13 13.8093 14.2368 14.6803 15.1404 15.6178 16.1130 16.6268 17.1599 17.7130 18.2868 18.8821 20.1406 21.4953 14 14.9474 15.4504 15.9739 16.5190 17.0863 17.6770 18.2919 18.9321 19.5986 20.2926 21.0151 22.5505 24.2149 22.9534 26.0192 24.5227 26.2116 28.0291 48.4966 27.9750 30.0949 32.3926 59.1959 15 16.0969 16.6821 17.2934 17.9319 18.5989 19.2957 20.0236 20.7841 16 17.2579 17.9324 18.6393 19.3802 20.1569 20.9710 21.8245 22.7193 21.5786 23.6575 22.4087 23.2760 25.1290 27.1521 29.3609 31.7725 34.4054 37.2797 72.0351 24.6411 25.6725 27.8881 30.3243 33.0034 35.9497 39.1899 42.7533 87.4421 17 18.4304 19.2014 20.0121 20.8647 21.7616 22.7050 18 19.6147 20.4894 21.4123 22.3863 23.4144 24.4997 23.6975 25.6454 24.7417 25.8404 26.9964 28.2129 30.8402 33.7502 36.9737 40.5447 44.5008 48.8837 105.9306 26.8551 28.1324 29.4812 30.9057 33.9990 37.4502 41.3013 45.5992 50.3959 55.7497 128.1167 19 20.8109 21.7967 22.8406 23.9460 25.1169 26.3572 27.6712 29.0636 30.5390 32.1027 33.7600 37.3790 20 22.0190 23.1237 24.2974 25.5447 26.8704 28.2797 29.7781 31.3714 33.0660 34.8683 36.7856 21 23.2392 24.4705 25.7833 27.1833 28.6765 30.2695 31.9692 33.7831 35.7193 37.7861 39.9927 30 34.7849 37.5387 40.5681 43.9027 47.5754 51.6227 56.0849 40 48.8864 54.2679 60.4020 67.4026 75.4013 84.5503 95.0255 61.0071 107.0303 66.4388 72.4355 79.0582 120.7998 136.6056 154.7620 40.9955 44.8652 94.4608 199.6351 41.4463 45.7620 50.4229 113.2832 259.0565 46.0185 51.1591 56.9395 51.1601 56.7645 136.3075 337.8824 57.2750 64.0025 164.4940 442.5926 64.2028 72.2651 199.0209 581.8261 63.4397 72.0524 81.6987 241.3327 767.0914 154.7400 186.6880 225.0256 1181.8816 7343.8578 Table 5 Future Value of an Annuity Due of $1 FVAD = (((1+i)" - 1/i) (1 + i)) n/i 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 1 1.0100 1.0150 1.0200 1.0250 1.0300 1.0350 1.0400 1.0450 1.0500 1.0550 1.0600 1.0700 1.0800 1.0900 1.1000 1.1100 1.1200 1.2000 2 2.0301 2.0452 2.0604 2.0756 2.0909 2.1062 2.1216 2.1370 2.1525 2.1680 2.1836 2.2149 2.2464 2.2781 2.3100 2.3421 2.3744 2.6400 3 3.0604 3.0909 3.1216 3.1525 3.1836 3.2149 3.2465 3.2782 3.3101 3.3423 3.3746 3.4399 3.5061 3.5731 3.6410 3.7097 3.7793 4.3680 4 4.1010 4.1523 4.2040 4.2563 4.3091 4.3625 44163 4.4707 4.5256 4.5811 4.6371 4.7507 4.8666 4.9847 5.1051 5.2278 5.3528 6.4416 5 5.1520 5.2296 5.3081 5.3877 5.4684 5.5502 5.6330 5.7169 5.8019 5 8881 5.9753 6.1533 6.3359 6.5233 6.7156 6.9129 7.1152 8.9299 6 6.2135 6.3230 6.4343 6.5474 6.6625 6.7794 6.8983 7.0192 7.1420 7.2669 7.3938 7.6540 7.9228 8.2004 8.4872 8.7833 9.0890 11.9159 7 7.2857 7.4328 7.5830 7.7361 7.8923 8.0517 8.2142 8.3800 8.5491 8.7216 8.8975 9.2598 9.6366 10.0285 10.4359 8 8.3685 8.5593 8.7546 8.9545 9.1591 9 9.4622 9.7027 9.9497 10.2034 104639 9.3685 10.7314 9.5828 9.8021 10.0266 10.2563 10.4913 10.9780 114876 12.0210 12.5795 10.8594 13.1640 11.2997 154991 13.7757 19.7989 11.0061 11.2882 11.5779 11.8754 12.1808 12.8164 13.4866 14.1929 14.9374 15.7220 16.5487 24.9587 10 10.5668 10.8633 11.1687 11.4835 11.8078 12.1420 12.4864 12.8412 13.2068 13.5835 13.9716 14.7836 15.6455 16.5603 17.5312 18.5614 19.6546 31.1504 11 11.6825 12.0412 12.4121 12.7956 13.1920 13.6020 14.0258 14.4640 14.9171 15.3856 15.8699 16.8885 17.9771 19.1407 20.3843 21.7132 23.1331 38.5805 12 12.8093 13.2368 13.6803 14.1404 14.6178 15.1130 15.6268 16.1599 16.7130 17.2868 17.8821 19.1406 20.4953 21.9534 23.5227 25.2116 27.0291 474966 13 13.9474 14.4504 14.9739 15.5190 16.0863 16.6770 17.2919 17.9321 18.5986 19.2926 20.0151 21.5505 23.2149 25.0192 26.9750 29.0949 31.3926 58.1959 14 15.0969 15.6821 16.2934 16.9319 17.5989 18.2957 19.0236 19.7841 20.5786 21.4087 22.2760 24.1290 26.1521 28.3609 30.7725 15 16.2579 16.9324 17.6393 18.3802 19.1569 19.9710 20.8245 21.7193 22.6575 23.6411 24.6725 26.8881 29.3243 32.0034 34.9497 33.4054 38.1899 16 17.4304 18.2014 19.0121 19.8647 20.7616 21.7050 22.6975 23.7417 24.8404 25.9964 27.2129 29.8402 32.7502 35.9737 17 18.6147 194894 20.4123 21.3863 22.4144 23.4997 24.6454 25.8551 27.1324 28.4812 29.9057 32.9990 36.4502 40.3013 39.5447 44.5992 43.5008 49.3959 18 19.8109 20.7967 21.8406 22.9460 24.1169 25.3572 26.6712 28.0636 29.5390 31.1027 32.7600 36.3790 40.4463 45.0185 50.1591 19 21.0190 22.1237 23.2974 24.5447 25.8704 27.2797 28.7781 30.3714 32.0660 33.8683 35.7856 39.9955 44.7620 50.1601 20 22.2392 23.4705 24.7833 26.1833 27.6765 29.2695 30.9692 32.7831 34.7193 36.7861 38.9927 43.8652 49.4229 55.7645 21 23.4716 24.8376 26.2990 27.8629 29.5368 31.3289 33.2480 35.3034 37.5052 25 28.5256 30.5140 32.6709 35.0117 37.5530 40.3131 43.3117 46.5706 50.1135 39.8643 53.9660 42.3923 48.0057 54.4568 58.1564 30 35.1327 38.1018 41.3794 45.0003 49.0027 53.4295 58.3283 63.7524 69.7608 40 49.3752 55.0819 61.6100 69.0876 77.6633 87.5095 98.8265 111.8467 126.8398 76.4194 144.1189 83.8017 164.0477 67.6765 101.0730 213.6096 78.9544 122.3459 279.7810 61.8733 92.3240 148.5752 368.2919 56.2750 63.0025 70.4027 108.1818 180.9434 486.8518 55.9395 63.2028 71.2651 80.2143 126.9988 220.9132 645.8269 36.2797 41.7533 47.8837 54.7497 62.4397 71.0524 80.6987 91.5026 149.3339 71.0351 86.4421 104.9306 127.1167 153.7400 185.6880 224.0256 270.0307 566.3773 270.2926 1418.2579 859.1424 8812.6294 TABLE 2 Present value of $1 PV = $1/(1 + i)" n/i 1.0% 1 0.99010 1.5% 0.98522 2.0% 0.98039 2.5% 0.97561 3.0% 0.97087 3.5% 0.96618 4.0% 0.96154 2 0.98030 0.97066 0.96117 0.95181 0.94260 0.93351 0.92456 4.5% 0.95694 0.91573 5.0% 0.95238 5.5% 0.94787 0.90703 0.89845 6.0% 0.94340 0.89000 7.0% 0.93458 0.87344 8.0% 0.92593 0.85734 9.0% 0.91743 0.84168 10.0% 0.90909 0.82645 11.0% 0.90090 12.0% 0.89286 20.0% 0.81162 0.79719 0.83333 0.69444 3 0.97059 0.95632 0.94232 0.92860 0.91514 0.90194 0.88900 0.87630 0.86384 0.85161 0.83962 0.81630 0.79383 0.77218 0.75131 0.73119 0.71178 0.57870 4 0.96098 0.94218 0.92385 0.90595 0.88849 0.87144 0.85480 0.83856 0.82270 0.80722 0.79209 0.76290 0.73503 0.70843 0.68301 0.65873 0.63552 0.48225 5 0.95147 0.92826 0.90573 0.88385 0.86261 0.84197 0.82193 0.80245 0.78353 0.76513 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 0.40188 6 0.94205 0.91454 0.88797 0.86230 0.83748 0.81350 0.79031 0.76790 0.74622 0.72525 0.70496 0.66634 7 0.93272 0.90103 0.87056 0.84127 0.81309 0.78599 0.75992 0.73483 0.71068 0.68744 0.66506 0.62275 0.63017 0.58349 0.59627 0.56447 0.53464 0.50663 0.33490 0.54703 0.51316 0.48166 0.45235 0.27908 8 0.92348 0.88771 0.85349 0.82075 0.78941 0.75941 0.73069 0.70319 0.67684 0.65160 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.23257 9 0.91434 0.87459 0.83676 0.80073 0.76642 0.73373 0.70259 0.67290 0.64461 0.61763 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.19381 10 0.90529 0.86167 0.82035 0.78120 0.74409 0.70892 0.67556 0.64393 0.61391 0.58543 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.16151 11 0.89632 0.84893 0.80426 0.76214 0.72242 0.68495 0.64958 0.61620 0.58468 0.55491 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.13459 12 0.88745 0.83639 0.78849 0.74356 0.70138 0.66178 0.62460 0.58966 0.55684 0.52598 0.49697 0.44401 0.39711 0.35553 13 0.87866 0.82403 0.77303 0.72542 0.68095 0.63940 0.60057 0.56427 0.53032 0.49856 0.46884 0.41496 0.36770 0.32618 0.31863 0.28966 0.28584 0.25668 0.11216 0.25751 0.22917 0.09346 14 0.86996 0.81185 0.75788 0.70773 0.66112 0.61778 0.57748 0.53997 0.50507 0.47257 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.07789 15 0.86135 0.79985 0.74301 0.69047 0.64186 0.59689 0.55526 0.51672 0.48102 0.44793 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.06491 16 0.85282 0.78803 0.72845 0.67362 0.62317 0.57671 0.53391 0.49447 0.45811 0.42458 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0.16312 0.05409 17 0.84438 0.77639 0.71416 0.65720 0.60502 0.55720 0.51337 0.47318 0.43630 0.40245 0.37136 0.31657 0.27027 0.23107 0.19784 0.16963 0.14564 0.04507 18 0.83602 0.76491 0.70016 0.64117 0.58739 0.53836 0.49363 0.45280 0.41552 0.38147 0.35034 0.29586 0.25025 0.21199 0.17986 0.15282 0.13004 0.03756 19 0.82774 0.75361 0.68643 0.62553 0.57029 0.52016 0.47464 0.43330 0.39573 0.36158 0.33051 0.27651 0.23171 0.19449 0.16351 0.13768 0.11611 0.03130 20 0.81954 0.74247 0.67297 0.61027 0.55368 0.50257 0.45639 0.41464 0.37689 0.34273 0.31180 0.25842 0.21455 21 0.81143 0.73150 0.65978 0.59539 0.53755 0.48557 0.43883 0.39679 0.35894 0.32486 0.29416 0.24151 0.19866 0.17843 0.16370 0.14864 0.12403 0.10367 0.02608 0.13513 0.11174 0.09256 0.02174 24 0.78757 0.69954 0.62172 0.55288 0.49193 0.43796 0.39012 0.34770 0.31007 0.27666 0.24698 0.19715 0.15770 0.12640 25 0.77977 0.68921 0.60953 0.53939 0.47761 0.42315 0.37512 0.33273 0.29530 0.26223 0.23300 0.18425 0.14602 0.11597 0.10153 0.09230 0.08170 0.06588 0.01258 0.07361 0.05882 0.01048 28 0.75684 0.65910 0.57437 0.50088 0.43708 0.38165 0.33348 0.29157 0.25509 0.22332 0.19563 0.15040 0.11591 0.08955 0.06934 0.05382 0.04187 0.00607 29 0.74934 0.64936 0.56311 0.48866 0.42435 0.36875 0.32065 0.27902 0.24295 0.21168 0.18456 0.14056 0.10733 0.08215 0.06304 0.04849 0.03738 0.00506 30 0.74192 0.63976 0.55207 0.47674 0.41199 0.35628 0.30832 0.26700 0.23138 0.20064 0.17411 0.13137 0.09938 0.07537 0.05731 0.04368 0.03338 0.00421 31 0.73458 0.63031 0.54125 0.46511 0.39999 0.34423 0.29646 0.25550 0.22036 0.19018 0.16425 0.12277 40 0.67165 0.55126 0.45289 0.37243 0.30656 0.25257 0.20829 0.17193 0.14205 0.11746 0.09722 0.06678 0.09202 0.04603 0.06915 0.05210 0.03935 0.02980 0.00351 0.03184 0.02209 0.01538 0.01075 0.00068 Table 4 Present Value of an Ordinary Annuity of $1 PVA = (1 - (1/(1 + i)"))/i n/i 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 1 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 0.95238 0.94787 0.94340 0.93458 0.92593 2 1.97040 1.95588 1.94156 1.92742 1.91347 1.89969 1.88609 1.87267 1.85941 3 2.94099 2.91220 2.88388 2.85602 2.82861 2.80164 2.77509 2.74896 2.72325 1.84632 2.69793 1.83339 1.80802 1.78326 9.0% 0.91743 1.75911 10.0% 11.0% 12.0% 20.0% 0.90909 1.73554 0.90090 1.71252 0.89286 1.69005 0.83333 1.52778 2.67301 2.62432 2.57710 4 3.90197 3.85438 3.80773 3.76197 3.71710 3.67308 3.62990 3.58753 3.54595 3.50515 3.46511 3.38721 3.31213 2.53129 3.23972 2.48685 2.44371 2.40183 2.10648 3.16987 3.10245 3.03735 2.58873 5 4.85343 4.78264 4.71346 4.64583 4.57971 4.51505 4.45182 4.38998 4.32948 4.27028 4.21236 4.10020 3.99271 3.88965 3.79079 3.69590 3.60478 2.99061 6 5.79548 5.69719 5.60143 5.50813 5.41719 5.32855 5.24214 5.15787 5.07569 4.99553 4.91732 4.76654 4.62288 4.48592 4.35526 4.23054 4.11141 3.32551 7 6.72819 6.59821 6.47199 6.34939 6.23028 6.11454 6.00205 5.89270 5.78637 5.68297 5.58238 5.38929 5.20637 8 7.65168 7.48593 7 32548 7.17014 7.01969 6.87396 6.73274 6.59589 6.46321 6.33457 6.20979 5.97130 5.74664 9 8.56602 8.36052 8.16224 7.97087 7.78611 7.60769 7.43533 7.26879 7.10782 6.95220 6.80169 6.51523 6.24689 5.03295 5.53482 5.99525 4.86842 4.71220 4.56376 3.60459 5.33493 5.14612 4.96764 3.83716 5.75902 5.53705 5.32825 4.03097 10 9.47130 9.22218 8.98259 8.75206 8.53020 8.31661 8.11090 7.91272 7.72173 7.53763 7.36009 7.02358 6.71008 6.41766 6.14457 5.88923 5.65022 4.19247 11 10.36763 10.07112 9.78685 12 11.25508 10.90751 13 12.13374 11.73153 14 13.00370 12.54338 15 13.86505 13.34323 10.57534 11.34837 12.10625 12.84926 9.51421 10.25776 10.98319 11.69091 9.25262 9.00155 8.76048 8.52892 8.30641 8.09254 7.88687 7.49867 7.13896 6.80519 6.49506 6.20652 5.93770 4.32706 9.95400 9.66333 9.38507 10.63496 11.29607 10.30274 9.98565 10.92052 12.38138 11.93794 16 14.71787 14.13126 17 15.56225 14.90765 18 16.39827 15.67256 19 17.22601 16.42617 20 18.04555 17.16864 13.57771 14.29187 14.99203 15.67846 16.35143 13.05500 13.71220 14.35336 14.97889 12.56110 13.16612 11.51741 12.09412 10.56312 11.11839 11.65230 9.11858 9.68285 10.22283 10.73955 8.86325 8.61852 8.38384 7.94269 7.53608 7.16073 6.81369 6.49236 6.19437 4.43922 9.39357 9.11708 8.85268 8.35765 7.90378 7.48690 7.10336 6.74987 6.42355 4.53268 9.89864 9.58965 9.29498 8.74547 8.24424 7.78615 7.36669 6.98187 6.62817 4.61057 10.37966 10.03758 9.71225 9.10791 8.55948 8.06069 7.60608 7.19087 6.81086 4.67547 12.65132 13.75351 13.18968 14.32380 13.70984 12.16567 12.65930 13.13394 11.23402 11.70719 10.83777 11.27407 10.46216 10.86461 10.10590 9.44665 8.85137 8.31256 7.82371 7.37916 6.97399 4.72956 10.47726 9.76322 9.12164 8.54363 8.02155 7.54879 7.11963 4.77463 12.15999 11.68959 11.24607 10.82760 10.05909 9.37189 8.75563 8.20141 7.70162 7.24967 4.81219 12.59329 12.08532 11.60765 15.58916 14.87747 14.21240 13.59033 13.00794 12.46221 11.95038 11.15812 11.46992 10.33560 9.60360 8.95011 8.36492 7.83929 7.36578 4.84350 10.59401 9.81815 9.12855 8.51356 7.96333 7.46944 4.86958 21 18.85698 17.90014 17.01121 16.18455 15.41502 14.69797 14.02916 13.40472 12.82115 12.27524 25 22.02316 20.71961 19 52346 18.42438 17.41315 16.48151 15.62208 14.82821 14.09394 13.41393 11.76408 12.78336 10.83553 10.01680 9.29224 8.64869 8.07507 7.56200 4.89132 30 25.80771 24.01584 22.39646 20.93029 40 32.83469 29.91585 27.35548 25.10278 19.60044 23.11477 18.39205 17.29203 16.28889 15.37245 14.53375 13.76483 21.35507 19.79277 18.40158 17.15909 16.04612 15.04630 11.65358 12.40904 13.33171 10.67478 9.82258 9.07704 8.42174 7.84314 4.94759 11.25778 11.92461 10.27365 9.42691 10.75736 9.77905 8.69379 8.95105 8.05518 4.97894 8.24378 4.99660 Table 6 Present Value of an Annuity Due of $1 PVAD = ((1 - (1/(1 + i)n))/i) (1+i) n/i 1.0% 1.5% 2.0% 2.5% 3.0% 1 1.00000 1.00000 1.00000 1.00000 1.00000 3.5 % 1.00000 4.0% 4.5% 5.0 % 1.00000 1.00000 1.00000 5.5% 1.00000 6.0% 7.0% 8.0% 9.0% 10.0% 1.00000 1.00000 2 1.99010 1.98522 1.98039 1.97561 1.97087 1.96618 1.96154 1.95694 1.95238 1.94787 1.94340 3 2.97040 2.95588 2.94156 2.92742 2.91347 2.89969 2.88609 2.87267 2.85941 2.84632 2.83339 1.93458 2.80802 1.00000 1.92593 2.78326 1.00000 1.00000 1.91743 1.90909 2.75911 2.73554 11.0% 1.00000 1.90090 2.71252 12.0% 1.00000 20.0% 1.00000 1.89286 1.83333 2.69005 2.52778 4 3.94099 3.91220 3.88388 3.85602 3.82861 3.80164 3.77509 3.74896 3.72325 3.69793 5 4.90197 4.85438 4.80773 4.76197 4.71710 4.67308 4.62990 4.58753 4.54595 4.50515 3.67301 4.46511 6 5.85343 5.78264 5.71346 5.64583 5.57971 5.51505 5.45182 5.38998 5.32948 5.27028 7 6.79548 6.69719 6.60143 6.50813 6.41719 6.32855 6.24214 6.15787 6.07569 5.99553 8 7.72819 7.59821 7.47199 7.34939 7.23028 7.11454 7.00205 6.89270 6.78637 6.68297 5.21236 5.91732 6.58238 3.62432 4.38721 5.10020 3.57710 4.31213 3.53129 4.23972 3.48685 4.16987 3.44371 4.10245 3.40183 3.10648 4.03735 3.58873 4.99271 4.88965 4.79079 4.69590 4.60478 3.99061 5.76654 5.62288 5.48592 6.38929 6 20637 6.03295 5.35526 5.86842 5.23054 5.11141 4.32551 5.71220 5.56376 4.60459 9 8.65168 8.48593 8.32548 8.17014 8.01969 7.87396 7.73274 7.59589 7.46321 7.33457 7.20979 6.97130 6.74664 6.53482 6.33493 10 9.56602 9.36052 9.16224 8.97087 8.78611 8.60769 8.43533 8.26879 8.10782 7.95220 7.80169 7.51523 7.24689 6.99525 6.75902 6.14612 6.53705 5.96764 4.83716 6.32825 5.03097 11 10.47130 10.22218 9.98259 12 11.36763 11.07112 10.78685 9.75206 10.51421 13 12.25508 11.90751 14 13.13374 12.73153 15 14.00370 13.54338 16 14.86505 14.34323 17 15.71787 15.13126 18 16.56225 15.90765 12223 19 17.39827 20 21 25 30 40 18.22601 19.04555 22.24339 26.06579 33.16303 9.53020 10.25262 9.76048 11.57534 11.25776 10.95400 10.66333 10.38507 12.34837 11.98318 11.63496 11.30274 10.98565 13.10625 12.69091 12.29607 11.92052 11.56312 13.84926 13.38138 12.93794 12.51741 12.11839 14.57771 14.05500 13.56110 13.09412 15.29187 14.71220 14.16612 16.67256 15.99203 15.35336 17.42617 16.67846 15.97889 14.70984 18.16864 17.35143 16.58916 15.87747 15.21240 21.03041 19.91393 18.88499 17.93554 17.05837 24.37608 22.84438 21.45355 20.18845 19.03577 30.36458 27.90259 25.73034 23.80822 22.10250 9.31661 9.11090 8.91272 8.72173 8.53763 8.36009 8.02358 7.71008 7.41766 7.14457 6.88923 6.65022 5.19247 10.00155 9.30641 13.65132 14.75351 15.32380 14.18968 9.52892 10.11858 9.86325 9.61852 10.68285 10.39357 10.11708 9.85268 11.22283 10.89864 10.58965 10.29498 11.73955 11.37966 11.03758 10.71225 10.10791 12.65230 12.23402 11.83777 11.46216 11.10590 13.16567 12.70719 12.27407 11.86461 11.47726 10.76322 13.65930 13.15999 12.68959 12.24607 11.82760 11.05909 10.37189 14.13394 13.59329 13.08532 12.60765 12.15812 11.33560 10.60360 14.59033 14.00794 13.46221 12.95038 12.46992 11.59401 10.81815 16.24696 15.49548 14.79864 14.15170 13.55036 12.46933 11.52876 17.98371 17.02189 16.14107 15.33310 14.59072 13.27767 20.58448 19.22966 18.01704 16.92866 15.94907 14.26493 9.09254 8.88687 8.49867 8.13896 7.80519 7.49506 7.20652 6.93770 5.32706 9.38384 8.94269 9.35765 8.53608 8.16073 7.81369 7.49236 7.19437 5.43922 8.90378 8.48690 8.10336 7.74987 7.42355 5.53268 9.74547 9.24424 8.78615 8.36669 7.98187 7.62817 5.61057 9.55948 9.06069 8.60608 8.19087 7.81086 5.67547 10.44665 9.85137 9.31256 8.82371 8.37916 7.97399 5.72956 10.12164 9.54363 9.02155 8.54879 8.11963 5.77463 9.75563 9.20141 8.70162 8.24967 5.81219 9.95011 9.36492 8.83929 8.36578 5.84350 10.12855 9.51356 8.96333 8.46944 5.86958 10.70661 9.98474 9.34814 8.78432 5.93710 12.15841 12.87858 11.19828 11.72552 10.36961 9.65011 9.02181 5.97472 10.75696 9.93567 9.23303 5.99592 2 0.2 points 5 $15,750 Eye Deal Optometry leased vision-testing equipment from Insight Machines on January 1, 2024. Insight Machines manufactured the equipment at a cost of $210,000 and lists a cash selling price of $287,060. Appropriate adjusting entries are made quarterly. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Related Information: Lease term Quarterly lease payments years (20 quarterly periods) at January 1, 2024, and at March 31, June 30, September 30, and December 31 thereafter eBook Economic life of asset 5 years Interest rate charged by the lessor 4% Hint Print Required: References 1. Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024. 2. Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024. 2 Required 1 Required 2 0.2 points Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answer to the nearest whole dollar. eBook View transaction list Hint Print References Journal entry worksheet 1 2 3 4 Record the beginning of the lease for Eye Deal. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit > 2 Required 1 Required 2 0.2 points Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answer to the nearest whole dollar. eBook Hint View transaction list Print Journal entry worksheet N 3 4 < References Record the lease payment made by Eye Deal on January 1, 2024. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit 2 Required 1 Required 2 0.2 points Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answer to the nearest whole dollar. eBook Hint View transaction list Print References Journal entry worksheet 1 2 3 4 Record the lease payment made by Eye Deal on March 31, 2024. Note: Enter debits before credits. Date March 31, 2024 General Journal Debit Credit 2 Required 1 Required 2 0.2 points Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answer to the nearest whole dollar. eBook View transaction list Hint Journal entry worksheet Print < 1 2 3 4 References Record the amortization for Eye Deal. Note: Enter debits before credits. Date March 31, 2024 General Journal Debit Credit 0.2 2 points Required 1 Required 2 Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answer to the nearest whole dollar. eBook Hint View transaction list Print References Journal entry worksheet 1 2 3 Record the beginning of the lease for Insight Machines. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit > 2 Required 1 Required 2 0.2 points Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answer to the nearest whole dollar. eBook View transaction list Hint Print References Journal entry worksheet 2 Record the lease payment received by Insight Machines on January 1, 2024. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit 0.2 .... 2 points Required 1 Required 2 Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answer to the nearest whole dollar. eBook Hint View transaction list Print References Journal entry worksheet < 1 2 Record the lease payment received by Insight Machines on March 31, 2024. Note: Enter debits before credits. Date March 31, 2024 General Journal Debit Credit 0.2 3 points eBook Hint Print References Federated Fabrications leased a tooling machine on January 1, 2024, for a three-year period ending December 31, 2026. The lease agreement specified annual payments of $36,000 beginning with the first payment at the beginning of the lease, and each December 31 through 2025. The company had the option to purchase the machine on December 30, 2026, for $45,000 when its fair value was expected to be $60,000, a sufficient difference that exercise seems reasonably certain. The machine's estimated useful life was six years with no salvage value. Federated was aware that the lessor's implicit rate of return was 12%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Calculate the amount Federated should record as a right-of-use asset and lease liability for this finance lease. 2. Prepare an amortization schedule that describes the pattern of interest expense for Federated over the lease term. 3. Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the amount Federated should record as a right-of-use asset and lease liability for this finance lease. Note: Round your intermediate and final answer to the nearest whole dollar amount. Right-of-use asset and lease liability < Required 1 Required 2 > 0.2 3 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 points eBook Hint Prepare an amortization schedule that describes the pattern of interest expense for Federated over the lease term. Note: Round your intermediate and final answers to the nearest whole dollar amount. Enter all amounts as positive values. Lease Amortization Schedule Print References Date 01/01/2024 01/01/2024 Payments 12/31/2024 12/31/2025 12/31/2026 Total Effective Interest Decrease in Balance Outstanding Balance < Required 1 Required 3 3 Required 1 Required 2 Required 3 0.2 points eBook Hint Print References Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term. Note: Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 Record the lease. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit 3 Required 1 Required 2 Required 3 0.2 points eBook Hint Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term. Note: Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet Print References < 1 2 3 Record the cash payment. Note: Enter debits before credits. Date January 01, 2024 > 45678 General Journal Debit Credit 3 Required 1 Required 2 Required 3 0.2 points Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term. Note: Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list eBook Hint Print References Journal entry worksheet 1 4 5 6 7 8 > Record the amortization for Federated. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit 3 Required 1 Required 2 Required 3 0.2 points eBook Hint Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term. Note: Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet Print References 1 2 3 4 5 6 7 8 > Record lease payment. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit 3 Required 1 Required 2 Required 3 0.2 points Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term. Note: Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list eBook Hint Print References Journal entry worksheet < 1 2 3 4 LO Record the amortization for Federated. Note: Enter debits before credits. Date December 31, 2025 6 7 8 > General Journal Debit Credit 3 Required 1 Required 2 Required 3 0.2 points Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term. Note: Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. eBook Hint View transaction list Journal entry worksheet Print References < 1 2 3 4 Record lease payment. Note: Enter debits before credits. Date December 31, 2025 LO 5 6 7 8 00 General Journal Debit Credit > 3 Required 1 Required 2 Required 3 0.2 points eBook Hint Print References Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term. Note: Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 2 3 4 5 Record the amortization for Federated. Note: Enter debits before credits. Date December 31, 2026 00 8 General Journal Debit Credit 3 Required 1 Required 2 Required 3 0.2 points Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term. Note: Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list eBook Hint Print References Journal entry worksheet > 1 2 3 4 5 6 7 8 Record final lease payment. Note: Enter debits before credits. Date December 31, 2026 General Journal Debit Credit 0.2 4 points Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2024. International Machines manufactured the equipment at a cost of $85,000. Manufacturers Southern's fiscal year ends December 31. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Related Information: Lease term Quarterly rental payments Economic life of asset Fair value of asset Implicit interest rate eBook Hint Print Required: References 2 years (8 quarterly periods) $ 15,000 2 at the beginning of each period years $ 112,080 8% 1. Show how International Machines determined the $15,000 quarterly lease payments. 2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2024, and the second lease payment on April 1, 2024. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Show how International Machines determined the $15,000 quarterly lease payments. Note: Round your intermediate and final answers to the nearest whole dollar. PV factors based on Table or Calculator function: PV of Lease n = j= Lease Payment Required 1 Required 2 > Required 1 Required 2 Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2024, and the second lease payment on April 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the nearest whole dollar. View transaction list Journal entry worksheet 1 2 3 Record the lease. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit > Show less Required 1 Required 2 Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2024, and the second lease payment on April 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the nearest whole dollar. View transaction list Journal entry worksheet < 1 2 3 Record cash received. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit > Show less Required 1 Required 2 Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2024, and the second lease payment on April 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the nearest whole dollar. View transaction list Journal entry worksheet < 1 2 Record cash received. 3 Note: Enter debits before credits. Date April 01, 2024 General Journal Debit Credit Show less 6 0.2 points eBook Hint Print References To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2024, for $870,000 and immediately leased the building back. The operating lease is for the final 10 years of the building's estimated 20-year remaining useful life. The building has a fair value of $870,000 and a book value of $685,000 (its original cost was $1 million). The rental payments of $170,000 are payable to the insurance company each December 31. The lease has an implicit rate of 9%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. & 2. Prepare the appropriate entries for National Distribution Center on January 1, 2024 and December 31, 2024, to record the sale- leaseback and necessary adjustments. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. 6 View transaction list 0.2 points eBook Journal entry worksheet 1 2 3 4 Hint Record sale of building. Print References Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit View general journal Record entry Clear entry 6 View transaction list 0.2 points Journal entry worksheet < 1 2 3 4 eBook Hint Print References Record the beginning of the lease for National. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2024 Record entry Clear entry View general journal 6 View transaction list 0.2 points Journal entry worksheet < 1 2 3 4 eBook Hint Print References Record the lease payment made by National. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2024 View general journal Record entry Clear entry > 6 View transaction list 0.2 points eBook Journal entry worksheet < 1 2 3 4 Hint Print Record amortization for National. References Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2024 Record entry Clear entry View general journal 00 0.2 points On January 1, 2024, QuickStream Communications leased telephone equipment from Digium, Incorporated Digium's cash selling price for the equipment is $1,734,521. The lease agreement specifies six annual payments of $410,000 beginning December 31, 2024, and on each December 31 thereafter through 2029. The six-year lease is equal to the estimated useful life of the equipment. The contract specifies that lease payments for each year will increase by the higher of (a) the increase in the Consumer Price Index for the preceding year or (b) 2%. The CPI at the beginning of the lease is 140. Digium routinely leases equipment to other firms. The interest rate in these lease arrangements is 11%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Prepare the appropriate journal entries for QuickStream to record the lease at its beginning date of January 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the nearest whole dollar. eBook Print References 0.2 8 View transaction list points eBook Print References Journal entry worksheet 1 Record the beginning of the lease for QuickStream Communications. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit View general journal Record entry Clear entry > 9 0.2 points eBook Print References On January 1, 2024, QuickStream Communications leased telephone equipment from Digium, Incorporated. Digium's cash selling price for the equipment is $1,306,578. The lease agreement specifies six annual payments of $300,000 beginning December 31, 2024, and on each December 31 thereafter through 2029. The six-year lease is equal to the estimated useful life of the equipment. The contract specifies that lease payments for each year will increase by the higher of (a) the increase in the Consumer Price Index for the preceding year or (b) 3%. The CPI at the beginning of the lease is 120. Digium routinely leases equipment to other firms. The interest rate in these lease arrangements is 10%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Prepare the appropriate journal entries for QuickStream to record the lease at its beginning date of January 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount. 9 View transaction list 0.2 points Journal entry worksheet eBook Print References 1 Record the beginning of the lease for QuickStream Communications. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit View general journal Record entry Clear entry 10 0.2 points eBook Print References At January 1, 2024, Caf Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $33,000 beginning January 1, 2024, the beginning of the lease, and on each December 31 thereafter through 2031. The equipment was acquired recently by Crescent at a cost of $252,000 (its fair value) and was expected to have a useful life of 12 years with no salvage value at the end of its life. Because the lease term is only nine years, the asset does have an expected residual value at the end of the lease term of $101,266. Both (a) the present value of the lease payments and (b) the present value of the residual value (i.e., the residual asset) are included in the lease receivable because the two amounts combine to allow the lessor to recover its net investment. Crescent seeks a 10% return on its lease investments. By this arrangement, the lease is deemed to be a finance lease to the lessee. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. What will be the effect of the lease on Crescent's earnings for the first year (ignore taxes)? Note: Enter decreases with negative sign. 2. What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Crescent (ignore taxes)? 1. Effect on earnings 2. Lease receivable balance (end of year)