Exercise 21-4 Whispering Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Metlock Company. The term of the noncancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Metlock Company has the option to purchase the equipment for $14,800 upon termination of the lease. 2. The equipment has a cost and fair value of $154,000 to Whispering Leasing Company. The useful economic life is 2 years, with a salvage value of $14,800. 3. Metlock Company is required to pay $4,600 each year to the lessor for executory costs. 4. Whispering Leasing Company desires to earn a return of 9% on its investment. 5. Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor Click here to view factor tables (a) Prepare the journal entries on the books of Whispering Leasing to reflect the payments received under the lease and to recognize income for the years 2017 and 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round present value factor calculations to 5 decimal places, e.g. 0.527552 and the final answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit 1/1/17 Lease Receivable 14800 V Equipment 14800 12/31/17 V Cash Executory Costs Payable 4600 Lease Receivable Interest Revenue 12/31/18 Cash Executory Costs Payable 4600 Lease Receivable Interest Revenue (b) Assuming that Metlock Company exercises its option to purchase the equipment on December 31, 2018. prepare the journal entry to reflect the sale on Whispering's books. (Credit account titles are automatically indented when amount is entered Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts. Round present value factor calculations to 5 decimal places, eg, 0.527552 and the final answers to O decimal places 0.9. 5.275.) Date Account Titles and Explanation 12 31118 Ch Debit Credit INTEREST TABLES AND THEIR CONTENTS UTURE VALUE OF 1 TABLE. Contains the amounts to which I will accumulate if deposited now at a specified rate and left specified number of periods (Table 6.1). 3 4 Table 6.1 FUTURE VALUE OF 1 (FUTURE VALUE OF A SINGLE SUM) FVFR = (1+1)" (1) Periods 2% 24% 3% 4% 5% 6% 1 1.02000 1.02500 1.03000 1.04000 1.05000 1.06000 2 1.04040 1.05063 1.06090 1.08160 1.10250 1.12360 1.06121 1.07689 1.09273 1.12486 1.15763 1.19102 1.08243 1.10381 1.12551 1.16986 1.21551 1.26248 S 1.10408 1.13141 1.15927 1.21665 1.27628 1.33823 6 1.12616 1.13969_1.19405 1.26532 1.34010 1.41852 7 1.14869 1.18869 1.22987 1.31593 1.40710 1.50363 1.17166 1.21840 1.26677 1.36857 1.47746 1.59385 1.19509 1.24886 1.30477 1.42331 1.35133 1.68948 10 1.21899 1.28008 1.34392 1.48024 1.62889 1.79085 11 1.24337 1.31209 133423 1.53945 1.71034 1.89830 12 1.26824 1.344891.42576 1.60103 1.19586 2.01220 13 1.29361 1.37851 1.46853 1.66507 1.88565 2.13293 8 12 1.26824 1.34489 1.42576 1.60103 1.79586 2.01220 13 1.29361 137851 1.46853 1.66507 1.88565 2.13293 14 1.31948 1.41297 1.51259 1.73168 1.97993 2.26090 15 1.34587 1.44830 1.55797 1.80094 2.07893 2.39656 16 1.37279 1.48451 1.60471 1.87298 2.18287 2.54035 17 2.29202 2.69277 18 1.40024 1.52162 1.65285 1.94790 1.42825 1.55966 1.70243 2.02582 1.45681 1.59865 1.75351 2.10685 2.40662 2.85434 19 2152695 3.02560 20 1.48595 1.63862 1.80611 2.19112 2.65330 3.20714 21 1.51567 1.67958 1.86029 2127877 2.78596 3.39956 22 1.54598 1.72157 191610 2.36992 2.92526 3.60354 23 1.57690 1.76461 1.973592.46472 3,07152 3.81975 24 1.60844 1.80873 2.03279 2.56330 3.22510 4.04893 25 1.64061 1.85394 2.09378 2.66584 3.38635 4.29182 26 1.67342 1.90029 2.15659 2.77247 3.55562 4.54938 27 1.70689 1.94780 2.22129288337 5.73346 4.82233 28 1.74102 1.99650 2.28793 2.99870 3.92013 5.11169 29 1.77584 2.04641 2.35657 3.11865 4.11614 5.41839 30 1.81136 2.09757 2.42726 324340 4.32194 5.74349 31 453804 6.08810 1.84759 2.15001230008 3.37813 1.88454 2.20376 2.57508 3.50806 32 4.76494 6.45339 33 5.00319 1.92223 2.258852065234 3.64838 1.96068 2.315322.73191 519432 34 333333 135 1.99989 2.37321 2.81386 3.94609 2.03989 2.43254 2.99828 4.10393 5.51602 3.79182 36 6.84059 25103 4.63609 3.14725 8.63609 9.15425 9.70351 37 2.05069 2.49333 2.98523 4.26809 6.08141 38 6.38548 2.122302.555683.07478 4.43851 2. 1644 261957 3.16703461637 39 6.70475 2 20504 2.65506 3.26204 480102 03999 10.3 8% 9% 10% 11% 12% 15% (11) Periods 1.08000 1.09000 1.10000 111000 1.12000 1. 15000 1 1.16640 1.18810 1.21000 1.23210 1.25440 1.32250 2 1.25971 1.29503 1.33100 1.36763 1.40493 1.52088 1.36049 1.41158 1.46410 1.51807 1.57352 1.74901 4 1.46933 1.53862 1.61051 1.68506 1.76234 2.01136 5 1.58687 1.67710 177156 1.87041 1.97382 231306 6 2.66002 7 1.71382 1.82804 1.948722.07616 221068 1.85093 1.99256 2.14359 2.30454 2.47596 1.99900 2.171892.357952.55803 2.77308 3.05902 00 3.51788 9 2.15892 2.36736 2.59374 2.839423.10585 4.04556 10 2.33164 2.58043 2.85312 3.15176 3.47855 4.65239 11 12 13 14 13 16 17 18 19 20 21 2.51817 2.81267 3.13843 3.49845 3.89598 3.35025 2.71962 3.06581 3.45227 3.88328 4.36349. 6.15279 2.93719 3.34173 3.79750 4.31044 4.88711 7.07571 3.17217 3.64248 4.17725 4.784595.47357 8.13706 3.42594 3.97031 4.59497 5.310896.13039 9.35762 3.70002 4.32763 5.05447 5.895096.86604 10.76126 3.99602 4.71712 5.55992 6.54355765997 12.37545 4.31570 5.14166 6.11591726334 8.61276 14.23177 4.66096 5.60441 6.72750 8.06231 9.64629 16 36654 5.03383 6.10881 7.400258.94917 10.80385 18.82152 5.43654 6.65860 8.14028 9.93357 12.10031 21.64475 5.87146725757 3.95430 11.02627 13.552352489146 6.34115 91105 9.84973 12 23916 15.17863 28.62518 6.8454" 8.62308 10 83471 13.58546 17.0000032.91595 39633 939916 11 91515 1507956 19.040073785680 99506 10 24508 13.10999 16.13863 21.32483 43.53532 8.62911 1116714 14 42099 18.57990 33.83387 50.06561 9.31727 12 1 213 15 86309 20.62369 26.74993 557343 1006265 15 26963 1141940 12.89230 2995993662117 10 567614 461 19.19.434 25 41045 33.83511 "6.14354 11.7301150312111375 2320560 35517 22 24 25 26 27 29 30 31 3.70002 432763 5.05447 5.89509 6.8664 10.76126 17 3.99602 471712 5.5992 6.54355 7.68997 12.37545 18 431570 5.14166 6.11591 726334 8.61276 14.2317 19 16.36654 200 4.66096 5.6041 6.72750 8.06231 9.64629 5.03383 6.10881 740025 8.94917 10.80385 13.82152 21 5.43654 6.65860 814028 993357 12 10031 21.4475 22 5.87146 125787 8.95430 11.02627 13.55235 24.89146 13 634118 791108 184973 12.23916 15.17863 18.62518 24 6.8484 8.62308 10.83471 1358246 17.00000 291895 15 *739635 9.39916 1191818 15.07986 19.04007 37.85680 26 198806 10 24508 13.10999 16. 3865 212488 4353532 27 28 5.62711 11.16714 14.42099 1857990 23.88387 50.06561 931727 12 17 18 15 86309 20 62365 26.74993 575745 29 30 31 32 33 34 10.06266 15 26768 17 44940 2289230 2995992 6.211 10.85767 14.461 19.19434 15.4104535511 76 14354 11.3708 15.6333 21 1373 28 20-60 31313 8758307 126705 115205 23 22515 3130821 42 09153 10.65983 13 69013 18.72841 254767 34.15212 714262 11.80480 14.78534 20 41397 28.10244 38.5*485 8.962 1331552 15 9681 22 2.1.1 3091268 42.81808 19.135 16 1-18 1 2463 24 25384 3400396 47.52506.3134 176.12463 13.66623 26 43663 3404345616 4 179-6 0.43.2 2011591 2381293 41 1449 55 55934 330SJ11 139248. 21.24.2 1.40942 4.29.6 65 20008 93 02096 35 36 55 39 0 Table 6.2 PRESENT VALUE OF 1 (PRESENT VALUE OF A SINGLE SUM) PVF, = =(1+1) 4. (1) Periods 2% 249 3% 496 5% 6% 94340 1 98039 97561 97087 96154 95238 89000 2 96117 95181 9426092456 90703 94232 92860 91514 88900 86384 92385 90595.88849 85480 82270 3 83962 79209 4 5 74726 9057388385 86261 82193 78353 .70496 6 88797 8623083748 .79031 .74622 87056 84127 81309 75992 71068 7 .66506 8 8534982075 789417306967684 9 62741 59190 55839 83676 800737664270259 64461 82035 7812074409 67556 61391 8042676214 722426495858468 10 11 52679 12 49697 13 46854 7884974356 7013862460 55684 7730372542 .68095 6005753032 7578870733 .6611257748 50507 74301 69047 64156 $5526 48102 14 44230 13 41727 16 39365 12 37136 .7284567362623115339145511 714166572060502 3133243630 70016 64117 58739 4936541552 68643625533702947464 99573 18 35034 19 33051 31150 20 21 29416 22 27751 26150 24 24695 6729761027553684563937689 659783953953755 43583 35894 54654 38086 5215942196 34155 6341656670 506694057333557 62172 55288 49193 5901231001 609535393947761371229530 59738 52623 46369 3606928124 58556 31340 450193465226955 57437 50088 308 33345 25509 56311 435664343332065 24293 552074764 411930533 35135 $432545311 9999264522335 23300 21981 30 19563 11411 1645 29 18456 56311 48866 42435 32065 24295 30 55207 47674 41199 30832 23138 17411 31 54125 46511 39999 29646 22036 .16425 32 53063 45377 38834 28506 20987 15496 33 52023 44270 37703 2740919987 14619 34 5100343191 36604 26355 19035 13791 35 50003 42137 35538 25342 18129 13011 36 49022 411093450324367 .17266 .12274 37 48061 40107 33498 23430 .16444 11579 38 47119 9128 325232252915661 10924 39 461953817431575 21662 14915 10306 40 4528937243 30656 20829 14205 09722 8% 996 1096 119 1295 1596 () Period: 1 2 92593 91743 90909 90090 89286 86957 85734 84168 8264581162 79719 73614 79383_77218 75132 13119 21178 65752 7350370843 68301 658736355257175 68058 6499362092 59345 56743 49718 3 4 63017596275644753464 30663 43233 6 $ 9 10 11 5834954703 51316 4816645235 31594 54027 5018746651 433934035332690 5002546043 424103909236061 25406 463194224138554 35218 2197 24719 4253838753350493172828743 21494 39 11 35554 31563 28584 25655 15691 3677032618 21956 25751 2291716253 34045299252633323199 20452 14133 31524 37454 2393930900 133612299 2915925157 2176155291631210651 2702723107197551696314554 09293 2500521199 11956 1935:1300409551 2311 19449 1635113753 11511003 21455 19543 1455124031055905110 13 14 15 16 12 18 21 Table 6.3 FUTURE VALUE OF AN ORDINARY ANNUITY OF 1 (1+i)-1 FVF-OAN = (11) Periods 2% 1%% 3% 4% 595 6% 1 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 2 2.02000 2.02500 2.03000 2.04000 2.05000 2.06000 3 3.06040 3.07563 3.09090 3.12160 3.15250 3.18360 4 4.12161 4.15252 4.18363 4.24646 4.31013 437462 $ 5.20404 5.25633 5.30914 5.52563 5.63709 6 5.41632 6.63298 6.30812 6.38774 6.46841 6.80191 6.97532 2 7.43428 7.54743 7.66246 7.89829 8.14201 8.39384 8 8.58297 8.73612 8.89234 9.21423 9.54911 9.89747 9 11.02656 11.49132 10 13.18079 11 12.57789 14.20679 15.91713 14.97164 12 16.86994 13 17.71298 18.88214 14 19.59863 21.01507 15 21.57856 23.27597 16 17 23.65749 2584039 25.67253 28.21288 18 9.75463 9.95452 10.15911 10.58280 10.9497211.20338 11.46338 12.00611 12.16872 12.48347 12.80780 13.48635 13.41209 13.79555 14.19203 15.02581 14.68033 15:14044 15.61779 16.62684 15.97394 16.51895 17.03632 18 29191 17.29342 17.93193 19.5989120.02359 18.63929 19.38022 20.15689 21.82453 20.0120720.86473 21.76159 23.69751 2141231 22.38635 23.41444 25.64541 22.54056 23.94601 25 11687 27.67123 24 29737 25.54466 26.87037 29.77808 25.78332 2718327 25.67649 31.96920 27.29893 25.56286 30.53673 3424797 25 5419630.5344332.45285 36.61789 30.42136 32.34904 3442647 39.03260 32 03030 34.15776 36.4592641 64591 33.6091 36.00171 35 55304 14311 35.3443137.91200 40.709634708421 39 1598043.9309149.5158 411563045215533256539 19 28.13233 30.53900 33.06593 20 30.90365 33.75999 3678559 39.99273 43,39219 15.995 35.1924 38 50521 25 24 25 44.50200 473710 51 1134 50.51555 5456451 59. 15635 26 55.40155 13.6391 nkobject=kieso9781118742976c06-fea-0004&itemid=nopolice be deposited now at a specified rate of interest to permit withdrawal of 1 at the end of regular periode intervals for the specified number of periods (Table 6.4). Table 64 PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 1-1 do PVF-04 24% 396 () Periods 4% 5% 6% 1 98039 97561 97087 96154 95238 94340 2 1.94156 1.92742 1.91347 1.88609 1.85941 1.83339 3 2.88388 2.85602 282861 2.77509 2.72325 2.67301 4 3.80773 3.76197 3.71710 3.62990 3.54595 3.46511 5 4.71346 4.64583 4.57971 4.45182 4.32948 4.21236 6 5.60143 5.50813 5.41719 5.24214 5.07569 4.91732 7 5.58238 8 6.47199 6.34939 6.23028 6.00205 3.78637 7.32548 7.17014 7.01969 6.73274 6.46321 3.16224 7970877.78611 7.43533710782 6.20979 9 6.80169 10 736009 7.88637 11 12 8.38384 13 8.85368 14 9.29498 15 9.71225 16 10 10590 17 18 19 8.98259 8.75206 8.53020 8.11090 7.72173 9.78685951421 9.25262 8.76048 8.30641 10.57534 10.25776 9.95400 938507886325 11.34837 1098319 10.63496 9.98565 9.39357 12.10625 11.69091 11.29607 10.56312989364 12.84926 12.38158 11.93794 11.11839 10.37966 13.57771 13.05500 12.56110 1165230 10.3377 14.29187 13.71220 13.16612 12.16567 11 27407 14.99203 14.35336 13.75351 12.65930 11.69959 15.67846 14 97559 14 32380 13.13394 12.08332 1635143 15.58916 14.87747 13.59033 12.46221 1701121 16.15455 1541502 14.02916 12.82115 17.65805 16.96541 1593692 14.45112 13 16300 18 29230 17.53211 16.44561 1435654 13 45551 18.91393 169499 16,93554 1534696 13.19554 19.32346 15.42433 1741315 15 62308 1409194 30.12104 1595061 1759654 15.992 1437519 20.0690 19.46401 18 32703 16.32959 1454303 31.3513 19 96459 11 6411 1566306-149513 01.345 345355 19.18545 1511 15 1410 10.47726 1082760 11.15512 11:46992 115408 20 21 12.04158 22 23 12.30338 12.55036 12.3335 13.2105 29 13.59072
