Marin Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information relates to this agreement.

1.		The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years.
2.		The cost of the asset to the lessor is $341,000. The fair value of the asset at January 1, 2020, is $341,000.
3.		The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $20,010, none of which is guaranteed.
4.		The agreement requires equal annual rental payments, beginning on January 1, 2020.
5.		Collectibility of the lease payments by Marin is probable.

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(a)

• Your Answer
• Correct Answer (Used)

Assuming the lessor desires a 12% rate of return on its investment, calculate the amount of the annual rental payment required. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and the final answer to 0 decimal places e.g. 5,275.)

Amount of the annual rental payment

$enter the Amount of the annual rental payment in dollars

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Solution

List of Accounts

Attempts: 3 of 3 used

(b)

Prepare an amortization schedule that is suitable for the lessor for the lease term. (Round answers to 0 decimal places e.g. 5,275.)

MARIN LEASING COMPANY (Lessor) Lease Amortization Schedule
Date		Annual Lease Payment Plus URV		Interest on Lease Receivable		Recovery of Lease Receivable		Lease Receivable
1/1/20		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
1/1/20		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
1/1/21		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
1/1/22		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
1/1/23		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
1/1/24		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
1/1/25		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
12/31/25		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
		$enter a total amount for this column		$enter a total amount for this column		$enter a total amount for this column