on January 1, 2021, Yancey Inc. signed a 10 year non-cancelable lease agreement to lease a storage building from Holt warehouse company. Collectibility of lease payments is reasonably predictable and no important uncertainties surround the amount of cost yet to be incurred by the lesser. The following information pertains to this lease agreement.

a. The agreement requires equal rental payments at the beginning each year.

b. The fair value of the building on January 1, 2021 is $6 million however the book value to Holt is $4,950,000.

c. The building has an estimated economic life of 10 years, with no residual value. Yancey depreciate similar buildings using the straight-line method.

d. at the termination of the lease the title to the building will be transferred to the Lessee.

e. Yancey's incremental borrowing rate is 11% per year. Hold warehouse co-set the annual rental to ensure a 10% rate of return. The implicit rate of the lesser is known by Yancey Inc.

f. The yearly rental payment includes $15,000 of executor costs related to taxes on the property.

if the lease was nonrenewable, there was no bargain purchase option, title to the building does not pass to the Lessee at termination of the lease and the lease term was only for eight years, what type of lease with this before the Lessee?

a. Direct financing lease

b. operating lease

c. finance lease

d. sales type lease

NORAINE BACK Question 19 On January 1, 2021, Yancey, Inc. in 10-year cancellelease rement to lease a storage building from Holt Warehouse Company Collectibility of lease payments only redictable and remportant certain turround the amount of Coyet to be incurred by the The following format perting to this greement (a) The agreement requires equal rentalments at the beginning och year 10) The fair value of the Bulding on January 1, 2021 $6,000,000 however, the book value to Hot 14.990,000 The building as an estimated economice of 10 years, the residual vahe Yancey deprecies buildings in the straight-line method Ae Y cremental borrowing rates per year. Holt reco set the rental to 10% of return. The intrate of the lessor is known by Yancey, Inc. in the yearly rental payment includes $15,000 feetry costs related to tres on the root Buture Values Anti Period 59 10% 12 1.00000 1.00666 1.00000 1.60000 1.00000 2.05000 2,06000 2.08000 2:10000 2.1 2000 1.15250 3.1030 3.24540 431013 331000 3.37440 4337402 0611 4.64100 4.77931 5 3.525) 563709 5. 0.10510 6.35285 6 6.80191 5.3932 7.33593 7,71561 11SL 11 364 8.92200 9.45717 10.000 3.54911 9.09 10.6169 11.43 12.19000 112656 1149132 12.45756 135794 1477564 12.57700 1. 1807 14.45656 15.970 17.54074 Preventive 1 1. 129 09000 1.60000 L.00000 2 1:18 L140 1923 1.000 L2 3 2:56 2 33 2.73154 26 3.73325 2.67301 3.57310 146 14 5 4.461 43 40 6 5.14 5.21230 4 4791 478 7 6.07169 591733 10205 5.1992 S11141 652 61032 5642 5.1636 7.46121 7.1999 0561 5313 LH4 10 81072 7.2016 7.2469 675002 632025 01 ME 4 SAS the new, there are purchasestion de the ting does not pass the attention of the few and the term was only what type of bei Period 1 2 3 4 5 6 7 8 9 Future Value of Ordinary Annuity of 1 5% 6% 8% 10% 1.00000 1.00000 1.00000 1.00000 2.05000 2.06000 2.08000 2.10000 3.15250 3.18360 3.24640 3.31000 4.31013 4.37462 4.50611 4.64100 5.52563 5.63709 5.86660 6.10510 6.80191 6.97532 7.33592 7.71561 8.14201 8.39384 8.92280 9.48717 9.54911 9.89747 10.63663 11.43589 11.02656 11.49132 12.48756 13.57948 12.57789 13.18079 14.48656 15.93743 12% 1.00000 2.12000 3.37440 4.77933 6.35285 8.11519 10.08901 12.29969 14.77566 17.54874 10 Period 1 2 3 4 5 6 7 8 9 Present Value of an Annuity Due of 1 5% 6% 8% 10% 1.00000 1.00000 1.00000 1.00000 1.95238 1.94340 1.92593 1.90909 2.85941 2.83339 2.78326 2.73554 3.72325 3.67301 3.57710 3.48685 4.54595 4.46511 4.31213 4.16986 5.32948 5.21236 4.99271 4.79079 6.07569 5.91732 5.62288 5.35526 6.78637 6.58238 6.20637 5.86842 7.46321 7.20979 6.74664 6.33493 8.10782 7.80169 7.24689 6.75902 12% 1.00000 1.89286 2.69005 3.40183 4.03735 4.60478 5.11141 5.56376 5.96764 6.32825 10