Need help finding interest and amortization expense
A lease agreement that qualifies as a finance lease calls for annual lease payments of $50,000 over a four-year lease term (also the asset's useful life), with the first payment at January 1, the beginning of the lease. The interest rate is 7%. (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.) Required: a. Determine the present value of the lease upon the lease's inception. b. Create a partial amortization through the first payment on January 1, 2017 c. If the lessee's fiscal year is the calendar year, what would be the pretax amounts related to the lease that the lessee would report in its income statement for the first year ended December 31? Required A Required B Required C Determine the present value of the lease upon the lease's inception. (Round your answers to nearest whole number and round percentage answer to 1 decimal place.) PV factors based on Table or Calculator function: Lease Payment PVAD of $1 50,000 4 7.0% 181,216 PV of Lease Required A Required B Required C Create a partial amortization through the first payment on January 1, 2017. (Enter all amounts as positive values. Round your answers to nearest whole number.. Date Effective Interest Decrease in balance Payment 01/01/2016 01/01/2016 01/01/2017 Outstanding balance $ 181,216 131,216 90,401 $ $ $ 50,000 50,000 0 9,185 50,000 40,815 Required A Required C > Required A Required B Required C If the lessee's fiscal year is the calendar year, what would be the pretax amounts related to the lease that the lessee would report in its income statement for the first year ended December 31? (Round your answers to nearest whole number.) Impact on pretax income related to the lease: Interest expense Amortization expense Total expenses Required B Required C > A lease agreement that qualifies as a finance lease calls for annual lease payments of $50,000 over a four-year lease term (also the asset's useful life), with the first payment at January 1, the beginning of the lease. The interest rate is 7%. (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.) Required: a. Determine the present value of the lease upon the lease's inception. b. Create a partial amortization through the first payment on January 1, 2017 c. If the lessee's fiscal year is the calendar year, what would be the pretax amounts related to the lease that the lessee would report in its income statement for the first year ended December 31? Required A Required B Required C Determine the present value of the lease upon the lease's inception. (Round your answers to nearest whole number and round percentage answer to 1 decimal place.) PV factors based on Table or Calculator function: Lease Payment PVAD of $1 50,000 4 7.0% 181,216 PV of Lease Required A Required B Required C Create a partial amortization through the first payment on January 1, 2017. (Enter all amounts as positive values. Round your answers to nearest whole number.. Date Effective Interest Decrease in balance Payment 01/01/2016 01/01/2016 01/01/2017 Outstanding balance $ 181,216 131,216 90,401 $ $ $ 50,000 50,000 0 9,185 50,000 40,815 Required A Required C > Required A Required B Required C If the lessee's fiscal year is the calendar year, what would be the pretax amounts related to the lease that the lessee would report in its income statement for the first year ended December 31? (Round your answers to nearest whole number.) Impact on pretax income related to the lease: Interest expense Amortization expense Total expenses Required B Required C >
