Exercise 21-25 a-d (Part Level Submission) Tamarisk Corporation leases a building to Carla Vista, Inc. on January 1, 2020. The following facts pertain to the lease agreement. 1. The lease term is 10 years with equal annual rental payments of $3,848 at the end of each year. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. The building has a fair value of $34,800, a book value to Tamarisk of $23,200, and a useful life of 15 years. At the end of the lease term, Tamarisk and Carla Vista expect the residual value of the building to be $11,600, and this amount is guaranteed by Money, Inc., a third party. 5. Tamarisk wants to earn a 6% return on the lease, and collectibility of the payments is probable. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (b) Assume the present value of lease payments and third-party guarantee is $34,800 and the rate of return to amortize the net lease receivable to zero is 14.00%. Prepare the amortization schedules Tamarisk would use to amortize the net lease receivable to zero. (Round answers to o decimal places, e.g. 5,275.) TAMARISK CORPORATION (Lessor) Lease Amortization Schedule Sales-Type Lease Interest on Recovery of Lease Receivable Lease Receivable Date Annual Lease Payment Lease Receivable $ 1/1/20 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 12/31/29 12/31/30 *Rounded $2 TAMARISK CORPORATION (Lessor) Lease Amortization Schedule Direct Financing Lease Interest on Recovery of Lease Receivable Lease Receivable Date Annual Lease Payment Lease Receivable 1/1/20 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 12/31/29 12/31/29 *Rounded $1 Exercise 21-25 a-d (Part Level Submission) Tamarisk Corporation leases a building to Carla Vista, Inc. on January 1, 2020. The following facts pertain to the lease agreement. 1. The lease term is 10 years with equal annual rental payments of $3,848 at the end of each year. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. The building has a fair value of $34,800, a book value to Tamarisk of $23,200, and a useful life of 15 years. At the end of the lease term, Tamarisk and Carla Vista expect the residual value of the building to be $11,600, and this amount is guaranteed by Money, Inc., a third party. 5. Tamarisk wants to earn a 6% return on the lease, and collectibility of the payments is probable. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (b) Assume the present value of lease payments and third-party guarantee is $34,800 and the rate of return to amortize the net lease receivable to zero is 14.00%. Prepare the amortization schedules Tamarisk would use to amortize the net lease receivable to zero. (Round answers to o decimal places, e.g. 5,275.) TAMARISK CORPORATION (Lessor) Lease Amortization Schedule Sales-Type Lease Interest on Recovery of Lease Receivable Lease Receivable Date Annual Lease Payment Lease Receivable $ 1/1/20 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 12/31/29 12/31/30 *Rounded $2 TAMARISK CORPORATION (Lessor) Lease Amortization Schedule Direct Financing Lease Interest on Recovery of Lease Receivable Lease Receivable Date Annual Lease Payment Lease Receivable 1/1/20 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 12/31/29 12/31/29 *Rounded $1
