Question
Each of the three independent situations below describes a sales-type lease in which annual lease payments of $100,000 are payable at the beginning of each
Each of the three independent situations below describes a sales-type lease in which annual lease payments of $100,000 are payable at the beginning of each year. Each is a finance lease for the lessee.
| Situation |
| |||
|
| 1 | 2 | 3 | |
| Lease term (years) | 7 | 7 | 8 | |
| Lessors/lessees interest rate | 9% | 11% | 10% | |
| Residual value |
|
|
| |
| Estimated FV | $0 | $50,000 | $8,000 | |
| Guaranteed by lessee | $0 | $0 | $8,000 | |
|
|
|
|
| |
Determine the following amounts at the beginning of the lease For the Lessor:
- Amount of the lease payment
- Amount recorded as lease receivable
For the Lessee
- Amount of lease payment
- Amount recorded as ROU asset
- Total amount of interest related to the lease
- Yearly amortization expense
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Auditing Warehouse Performance
Authors: Kenneth B. Ackerman
1st Edition
0963177680, 978-0963177681
