Exercise 15-24 (Static) Calculation of annual lease payments; residual value [LO15-2, 15-6]

Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessors implicit rate of return. (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.)

Check 10 1 4 10% $50,000 $50,000 Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value Situation 2 3 7 5 11% 9% $350,000 $75,000 $350,000 $45,000 4 8 12% $465,000 $ 465,000 2.5 points 0 0 $ 50,000 0 $ 7,000 $ 7,000 $ 45,000 $ 50,000 eBook Hint Print 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. (Round your answers to the nearest whole dollar amount.) References Lease Payments Situation 1 Situation 2 Residual Value PV of Lease PV of Residual Right-of-use Asset/Lease Guarantee Payments Value Guarantee Liability $ 0 $ 50,000 $ 0 $ 50,000 $ 0 $ 0 0 $ 0 0 $ 0 $ 0 $ 0 Situation 3 Situation 4